New research by national estate agents Leaders has identified the top 10 towns in which buy-to-let properties generate the greatest return on investment. The company analysed purchase prices, rental returns and expected gross yields for two-bedroom flats in the towns across the UK in which it operates its 123 branches.
Michael Cool, National Lettings Director at Leaders, says: “It’s clear the buy-to-let market continues to offer a return that significantly outweighs other investment types, such as stocks and shares.
“From Bradford to Wigan and Durham to Blackpool, there are plenty of towns that investors can focus their attention on in order to achieve a sky-high yield.”
Average purchase price: £87,987
Average monthly rent: £469
Gross yield: 6.40 per cent
Located at the foot of the Pennines, Bradford has most recently become a UNESCO City of Film and Britain's Curry Capital! Plus, thanks to its regeneration efforts, this multicultural hotspot is starting to attract the attention it deserves. Just a 45-minute drive to Leeds and a 60-minute drive into Manchester, its proximity to big cities means it is an affordable commuter base - you're able to snap up a large property in Bradford for an average of £126,000, which is a steal in comparison to Leed's average asking price of over £200,000.
9) St Helens
Average purchase price: £85,909
Average monthly rent: £463
Gross yield: 6.46 per cent
Located in Merseyside, in north west Engalnd, St Helens is just east of Liverpool, placing it ideally on the commuter belt into the city. Recently benefitting from an influx of government funding designed to improve infrstructure, housing and amenities, St Helens is an ideal area for buy-to-let investments to thrive.
Average purchase price: £98,436
Average monthly rent: £533
Gross yield: 6.50 per cent
Durham's magnificent skyline showcases a small city, crammed with historical wonder and world-renowned heritage. Despite its huge tourist industry and global top-100 university, campaigns and initiatives are finally flaunting this beautiful city as an outstanding place to live and work. With regeneration projects and increasing employment opportunities, this city is a great place to buy a home.
Average purchase price: £109,750
Average monthly rent: £611
Gross yield: 6.68 per cent
Recent regeneration has transformed this former whaling port on the River Tay into a modern city with shops, restaurants, bars, galleries and other cultural venues. A compacty city, Dundee is easy to explore by foot, although public transport is excellent. The average house price in Dundee is just shy of £110,000, making it more affordable than other Scottish cities such as Edinburgh, proving an excellent choice for investment.
Average purchase price: £91,145
Average monthly rent: £508
Gross yield: 6.69 per cent
The northeastern city of Sunderland is within the county of Tyne and Wear, and is just south of Newcastle. Sitting on the coast, it has two award-winning beaches at Roker and Seaburn, and is also close to the vast open spaces of Northumberland and the North Pennines, which attract thousands of visitors every year - a great opportunity for buy-to-let investors.
Average purchase price: £84,728
Average monthly rent: £489
Gross yield: 6.92 per cent
Middlesbrough offers the lowest house prices on the list at just under £85,000, promising fantastic rental yields on a two-bedroom property coming in at only £489pcm, which guarantees a great yield for investors.
Average purchase price: £101,689
Average monthly rent: £601
Gross yield: 7.09 per cent
Located within the county of Greater Manchester, Wigan sits alongside the River Douglas and the town itself has a population of around 97,000 people. The town's population has a mean age of 39.6, which is about average for England - offering an ideal pool of tenants.
Average purchase price: £116,902
Average monthly rent: £775
Gross yield: 7.96 per cent
Glasgow straddles the banks of the River Clyde, dominating the surrounding area with its beautiful architecture, culture and urban design. It is the nation's largest city and, becoming Britain's largest seaport, it is often referred to as the UK's 'second city' due to its size and economic influence. The city is host to one of the country's top universities, making Glasgow the perfect opportunity for buy-to-let investors interested in targeting the student market.
Average purchase price: £94,509
Average monthly rent: £678
Gross yield: 8.60 per cent
A famous seaside resort in Lancashire, Blackpool was first noted in the Domesday Book. The town's population currently stands at around 142,000 and it's one of the most densely populated authorities in the UK, meaning landlords interested in investing in the area won't be short of prospective tenants.
Average purchase price: £98,360
Average monthly rent: £738
Gross yield: 9.00 per cent
Rochdale in Greater Manchester has topped the table for the most lucrative place in which to be a landlord, with low property prices and rents in a two-bedroom home of £738pcm translating into a gross annual yield of 9%. Despite the challenges facing the rental sector, yields - particularly in Northern England and Scotland - match up well against other forms of investment.
Michael adds: “There are some excellent returns on offer for buy-to-let investors in a range of locations, but it’s important to bear in mind that demand, prices and rental yields can differ dramatically within a town or city, depending on the exact location and property type.
“To make sure you choose the right property to meet your investment goals you should consult a reputable local expert like Leaders who can offer free professional advice and guidance.”
*All figures courtesy of Zoopla and correct as of 21/05/2019