Well, according to research from HSBC, it is, with average gross buy to let yields of 7.82%.
Now, I have to say, I’m not sure how HSBC conducted their research. The inference from the press release seems to be that they looked at yields in the locations where there is the greatest proportion of rented property. For example, they say that in Southampton almost 25% of the housing stock is rented.
I don’t know whether this has skewed the figures but I’m surprised at some of the absentees. For example, as, not so long ago, Middlesbrough was reputed to have the cheapest properties in the country, you’d expect it to be on the list, if the list were based purely on yield.
Similarly, what about Newcastle and Sunderland in the North East, or Oldham or Wigan in the North west, or Stoke on Trent in the Midlands?
I guess the answer might be that they have looked at average rents against average prices in each area which perhaps evens out the range, but in doing so it deflects from the actual yields achievable in some of these other areas.
Even so, the research is interesting, especially that relating to seaside towns. If you’ve read my eBook <a href=”http://www.thebuytoletinvestor.co.uk/how-to-buy-to-let”><em><strong>How to Buy to let: the Easy Way to Own £2m in Property in $ Short Years</strong></em></a>, you’ll know that I discuss the strategy of buying on the coast as being the preferred strategy of one of the world’s foremost investors.
Here’s the raw data from the HSBC release:
Table 1: Top 10 BTL Hotspots by Rental Yield
Location | Average Property Price | Average Rent (Monthly) | Rental Yield (gross) |
|
£138,311 | £901 | 7.82% |
|
£75,943 | £494 | 7.81% |
|
£69,519 | £450 | 7.77% |
|
£102,631 | £650 | 7.60% |
|
£83,313 | £524 | 7.55% |
|
£104,970 | £624 | 7.13% |
|
£171,581 | £975 | 6.82% |
|
£244,893 | £1,375 | 6.74% |
|
£91,012 | £498 | 6.57% |
|
£141,971 | £775 | 6.55% |
Seaside Towns
Many seaside towns are BTL hotspots with 17 of the top 50 areas found on the coast. Blackpool tops the seaside town list with a yield of 7.81%. The rest of the top ten is made up of southern seaside areas, including holiday destinations such as Brighton, Bournemouth and Eastbourne. While property prices tend to be higher in these areas, rents are also above average, meaning yields are strong for investors.Table 2: Top 10 Seaside BTL Hotspots by Rental Yield
Location | Average Property Price | Average Rent (Monthly) | Rental Yield (gross) |
|
£75,943 | £494 | 7.81% |
|
£170,493 | £825 | 5.81% |
|
£229,622 | £1,049 | 5.48% |
|
£139,168 | £598 | 5.16% |
|
£152,171 | £650 | 5.13% |
|
£181,399 | £695 | 4.60% |
|
£177,408 | £675 | 4.57% |
|
£180,227 | £654 | 4.35% |
|
£177,408 | £550 | 3.72% |
|
£181,399 | £524 | 3.47% |
Table 3: Top 10 London BTL Hotspots by Rental Yield
Location | Average Property Price | Average Rent (Monthly) | Rental Yield (gross) |
|
£401,405 | £2,058 | 6.15% |
|
£229,141 | £1,126 | 5.90% |
|
£261,163 | £1,200 | 5.51% |
|
£337,723 | £1,517 | 5.39% |
|
£333,122 | £1,363 | 4.91% |
|
£285,927 | £1,148 | 4.82% |
|
£428,987 | £1,694 | 4.74% |
|
£283,031 | £1,101 | 4.67% |
|
£364,296 | £1,387 | 4.57% |
|
£306,381 | £1,148 | 4.50% |