Where to invest in a buy-to-let property to get the best returns
Location, location, location is a cry often heard as the most important factor when looking for a new home. This key factor, however, also applies when you are looking to invest in a buy-to-let property.
The returns on a buy-to-let investment come from two areas - rental income and increase in property values. It makes sense, therefore to invest in an area where you can maximise your overall returns rather than just buy a property in your local area.
Here I take a look at the regions of the UK that can offer you the best return on your hard earned cash.
Average rental yields and property price growth by region
|
Region |
Rental Yield (1) |
Growth (2) |
Total Yield |
|
London |
4.5% |
16.3% |
20.8% |
|
South East |
4.9% |
7.8% |
12.7% |
|
East Anglia |
4.3% |
7.5% |
11.8% |
|
North West |
7.1% |
4.3% |
11.4% |
|
Yorkshire and Humberside |
6.8% |
4.0% |
10.8% |
|
South West |
3.9% |
6.2% |
10.1% |
|
East Midlands |
6.2% |
2.8% |
9.0% |
|
West Midlands |
6.0% |
2.8% |
8.8% |
|
Wales |
4.6% |
3.3% |
7.9% |
|
North East |
5.4% |
0.1% |
5.5% |
(1) Rental yields provided by LSL Property Services plc
(2) Property price trends provided by Rightmove
Conclusion
- There are no right or wrong answers to buy-to-let investment location, but as you can see from this table the returns can vary greatly
- It's probably no surprise that London and the South East are riding high on the table but high property prices in these areas could be a barrier to entry
- Be aware that these returns are a snapshot and both yield and growth can vary over time
- Rental yields above are quoted as gross without deductions for agency fees, void periods, maintenance etc.
(image by Stuart Miles via freedigitalphotos.net)
