Leeds steels itself for a ‘landlord goldrush’ as it tops the list of postcodes where buy-to-let developers could turn a profit on rental properties.
The buy-to-let interactive heatmap released today by TotallyMoney.com shows would-be property moguls an at-a-glance view of the potential yield from rental properties across more than 2,600 UK postcode districts.1
- Leeds (LS6 postcode) delivers a table-topping 10.79% yield, closely followed by Bradford (BD1) and York (YO1) offering yields of 10.33% and 9.73% respectively;
- Northern and Scottish investors have the best chances of realising a buy-to-let yield above the national average of 3.3%;
- The average 2.9% buy-to-let yield for London postcodes is lower than any other UK city.
- Sandbanks, the luxury peninsula in Poole that many football legends call home, has the lowest buy-to-let yield of any UK postcode.
The TotallyMoney.com Buy-to-let Yield Interactive Heatmap reveals the yield achievable in more than 2,682 postcode districts across England, Scotland and Wales, with data compiled from analysis of 441,777 properties on the market for sale or rent.
Winners and losers
Leeds (LS6) tops the table of the highest yielding places to invest in buy-to-let property with a yield of 10.79% and a decent pool of available properties.
|
Post town |
Postcode |
Median |
Median |
No. of properties for sale |
Yield |
|
Leeds |
LS6 |
£1.044 |
£116,115 |
92 |
10.79% |
|
Bradford |
BS1 |
£552 |
£64,108 |
48 |
10.33% |
|
York |
YO1 |
£1,876 |
£231,399 |
32 |
9.73% |
|
Preston |
PR1 |
£952 |
£125,810 |
553 |
9.08% |
|
Middlesbrough |
TS1 |
£523 |
£69,368 |
76 |
9.05% |
|
Liverpool |
L7 |
£720 |
£99,114 |
108 |
8.72% |
|
Manchester |
M3 |
£1,230 |
£177,546 |
166 |
8.31% |
|
Sheffield |
S1 |
£823 |
£118,861 |
54 |
8.31% |
|
Huddersfield |
HD1 |
£656 |
£101,536 |
69 |
7.75% |
|
Cardiff |
CF24 |
£1,220 |
£192,548 |
130 |
7.60% |
Source: TotallyMoney.com analysis
While scraping along at the bottom of the table we find the BH13 postcode in Poole, with a buy-to-let yield of only 1.13%.
|
Post town |
Postcode |
Median |
Median |
No. of properties |
Yield |
|
Bromley |
BR2 |
£1,300 |
£788,293 |
195 |
1.98% |
|
London |
N21 |
£1,339 |
£825,700 |
141 |
1.95% |
|
Northwood |
HA6 |
£1,732 |
£1,103,645 |
106 |
1.88% |
|
Birmingham |
B15 |
£1,013 |
£656,412 |
91 |
1.85% |
|
London |
W8 |
£4,920 |
£3,320,116 |
266 |
1.78% |
|
Reading |
RG8 |
£1,225 |
£865,454 |
109 |
1.70% |
|
London |
N2 |
£3,764 |
£2,733,640 |
176 |
1.65% |
|
Poole |
BH14 |
£1,288 |
£1,000,795 |
195 |
1.54% |
|
London |
N6 |
£2,779 |
£2,418,305 |
146 |
1.38% |
|
Poole |
BH13 |
£1,574 |
£1,668,641 |
245 |
1.13% |
Source: TotallyMoney.com analysis
Geographical divide
The study reveals a clear geographical divide between The North and The South with northern regions coming out on top and The South East showing particularly poorly.
Nine out of the 10 highest yielding postcode districts are in Scotland and the North/Midlands regions. The 10 lowest yielding postcodes, with the exception of Edgbaston and Holland Park in Birmingham, are all in Greater London, the South East and the South Coast.
No capital gains
Investors looking for higher yields would do well to avoid investing in buy-to-let properties in London: the average yield for London properties is 2.9% compared to the 3.3% national average.
It’s not all bad news for the capital – E20, the area around the Olympic Park in Stratford, tops a short list of London postcodes in which above average yields can still be earned.
|
Area |
Postcode |
Median monthly rent |
Median |
No. of properties |
Yield |
|
Olympic District |
E20 |
£2,632 |
£536,832 |
164 |
5.9% |
|
East Ham |
E6 |
£1,372 |
£343,046 |
226 |
4.8% |
|
Thamesmead |
SE28 |
£1,148 |
£292,140 |
88 |
4.7% |
|
Plaistow |
E13 |
£1,398 |
£365,169 |
163 |
4.6% |
|
Manor Park |
E12 |
£1,417 |
£396,374 |
126 |
4.3% |
Source: TotallyMoney.com analysis
Alastair Douglas, CEO of TotallyMoney.com, said of the findings: “Due to rapidly growing property prices, London is often seen as the best place to invest in property. However growth rate isn’t always mirrored in rent prices.
“This research shows that investors looking for high yields on rental developments might see better returns from properties in the cities of northern England and Scotland.”
1 Rental yield is defined as median annual rent divided by median asking price. Data are based on analysis of 303,822 properties for sale and 137,955 properties for rent marketed online in September 2016.