landlord hmo

Highest yields for property investors who choose this location type

It’s no secret that location is one of the most important considerations for property investors. But one location type in particular comes out on top for yields.

When choosing where to invest in property, there are many aspects to factor in. Which part of the country to invest in might be the first step, whether it be London, the south-east or the north-west.

A new study has now come out which looks at three specific location types for property investment. These are coastal areas, countryside locations and cities. The research, by Howsy, shows that these are the top-yielding location types compared to other areas, such as towns and suburbs.

The best location

Investing in property in a UK city is likely to give you the biggest yields, according to Howsy. Cities can attract yields of an average 5% for investors, which is comfortably above the 3.56% UK average.

The second best location type was the countryside, where average yields can be up to 3.72%. This was followed by seaside areas, with an average top investment yield of 3.59%.

Calum Brannan, founder and chief executive officer of Howsy, says: “Cities are typically the preferred place for a buy-to-let landlord when it comes to investing, largely due to the higher level of rental income and the consistent demand for rental homes. So it comes as no surprise that they are home to the highest yields overall.”

“That said, the coast and country can also prove to be very lucrative and as the figures show, there are plenty of options across both that offer yields way above the national average.”

City hotspots in the UK

For buy-to-let landlords, cities have a number of major benefits. They tend to see the highest rental demand, particularly among young professional tenants who want to live close to jobs, travel options and a social scene. Cities are also a favourite among new graduates who either want to stay on in their university city, or relocate to another city for employment.

Rents in city centres, due to the strong demand, can be higher than surrounding areas. City buy-to-let properties also tend to be apartments, which may come at a lower cost than larger properties elsewhere. Coupled with the higher rents they can attract, it is a popular property type among investors.

With plenty of major new developments popping up across the UK’s major cities, there are several options. Many property investors opt to buy off-plan new-builds as they can often access competitive starting prices and great yields. They also come with the added incentive for tenants to live in a brand new, well-located rental property.

The build-to-rent market, which involves purpose-built rental accommodation normally in city centres, is booming. London is the hotspot for this, followed by Birmingham, and there are hundreds of build-to-rent projects underway in places like Manchester, Liverpool, Leeds, Sheffield and Nottingham.

Investors can spread their portfolios

Today’s property investors are less likely to stick to just one location close to where they live, if they’re UK-based. Most can see the benefits of considering multiple locations for the best returns.

Calum Brannan adds: “While traditionally geographical distance may have made this tricky, the technological disruption of the buy-to-let sector has changed the way we invest and manage in bricks and mortar. With online and hybrid platforms allowing easy management from your front room, there’s no reason why you can’t invest the length and breadth of the UK.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT