Predicted Buy-to-Let Investment Hotspots for 2018
No-one invests in property for the fun of it. Every landlord chooses to rent out property in the hope of making money, whether that is through rental yields or capital growth. With that in mind, the location of your investment needs careful consideration if you are going to get a good return on your money.
When choosing an area for your UK property investment, there are practical considerations to think about, such as whether you want something close to you for easier management or it may be because of personal ties in the area. Choosing somewhere with good amenities will make your property more attractive to potential tenants, whilst you also need to consider the level of demand for property in the locale.
When all this is considered, you still need to be aware of the best places to incest to get a healthy rental yield.
Liverpool Property
Liverpool is a city that features highly in most lists of where to buy property. A number of postcodes within the area have the highest average yields in the UK including Edge Hill, Fairfield, Kensington and the city centre itself. The L7 postcode has the huge yield of 12.63%, but with the prices for Liverpool property investment lower than the UK average this could be the hottest of all hotspots. The area is home to three different universities as a well as an increasing number of young professionals, making rental demand in Liverpool high.
Other Liverpool postcodes take second, third, tenth and eleventh place in the list of highest average rental yields in the UK, making it well worth consideration.
North versus South
Whilst the north of the UK is usually thought of to give better value for money, it is actually Plymouth that takes the next spot on the list below Liverpool. The average yield of 10.15% leaves it sitting pretty above the 10.06% of Cleveland, 10.04% in Preston, 9.57% in Dudley and 8.91% in Nottingham.
Manchester is another city that makes multiple appearances in the list, its highest average yield being found unsurprisingly in Salford. This 8.25% yield is probably largely due to the influx of professionals wanting to work in or near the newly located MediaCity.
Whilst there a few anomalies, the north of the country makes up the majority of the list of highest yields in the UK, and it will not be a shock to many to discover that London makes up a good proportion of the worst performing areas. Despite the fact that rental prices in London are the highest in the country, the incredibly high property prices mean that much of the rent that is recovered will simply be paying for your extremely high investment. Bournemouth actually takes the honours of having the lowest average yield of just 1.41%.
Smaller Areas
What these postcodes show us is that strong rental yields can be limited to small areas, and these are often the ones that are undergoing significant regeneration. Low entry points are attracting landlords from all corners of the UK, but it is important to keep an eye on the market, as popular areas are seeing the market being driven by investors rather than renters which could end up leading to the problem of oversupply.
As property prices rise and lenders become more cautious, getting a decent return on invest is more of a challenge than it used to be. Before investing you need to have plenty of information at your disposal to make sure you put your money in the right place.
For more information on buy-to-let investment, please contact Hopwood House.