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Monday, April 22, 2013

Top 5 Buy-To-Let Yields

Those landlords in search of the highest buy-to-let yields need to go North according to a recent survey by HSBC.  The one exception in the top 5 locations is Southampton which tops to their chart of buy-to-let rental yields with 7.82%.  This results from the high average rent of £901 per month and the relatively affordable level of property prices.

Yields higher up north.

We have discussed in the past the importance of the buy-to-let rental yield.  This study of 50 towns and cities in the UK reveals that the other 4 locations in the UK with the highest rental yield are all in the North.  The relative affordability of property prices in Blackpool, Hull, Manchester and Nottingham propel them to the top of the rental yield table with rental yields of 7.81%, 7.77%, 7.60% and 7.55% respectively.

Smaller properties have higher yields

Within the same location landlords should appreciate that there are significant variations within the different types of property.  Smaller properties such as studio and 1 bed apartments will tend to yield significantly more that large detached properties.  Therefore, using averages can be misleading.  Also many buy-to-let yields statistics do not reflect the true rental yields being achieved by landlords who tend to select areas and properties with the highest rental yields and therefore the best rates of return on their capital employed.

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