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Despite uncertainty in the market, buy-to-lets continue to be an attractive investment for many. OneSavings Bank has posted above-forecast profits in August, thanks to high demand for buy-to-let mortgages. The specialist lender, based in Kent, moved its focus to professional landlords after the EU referendum because it forecasts such investors are in a good position to withstand any volatility in the market. The bank, which specialises in buy-to-let mortgages and loans to small businesses, is lowering its standard variable rate by 0.25 per cent in September in a bid to win even more business in the coming months.

The bank’s good fortune can be seen as evidence that confidence remains strong for property investors, which is a view backed up by a Shawbrook Bank survey of property professionals. The survey, conducted after the Brexit decision, indicates that 57 per cent of property investors are feeling confident about the lending environment with 58 per cent looking to invest in an additional buy-to-let property within the next year. However, they are not so sure about the long-term prospects for the UK economy. Some 48 per cent of investors are concerned about the outlook, which is up from 29 per cent at the beginning of the year.

One reason to be optimistic is that buy-to-lets are still a sound investment due to the fact that demand is outstripping supply, coupled with property prices keeping the option of buying out of the reach of many people, particularly those living in and around London and the South East. Private rents rose by 2.4 per cent across in the UK in the 12 months to July, according to Office for National Statistics (ONS) data. There are major regional variations with rent increases in South East England being the highest, where they were up 3.5 per cent. Increases in England as a whole were up 2.6 per cent, 0.2 per cent in Scotland and unchanged in Wales in the same period.

Some of the best rental yields can be found in buy-to-lets next to universities in the northern England. The Property Partner crowdfunding platform has compiled a list of 86 university towns and cities according to net rental yield. Top of the table was Sunderland with a 6.9 per cent net yield. Other good investment areas are Middlesbrough at 5.9 per cent, Birmingham at 4.5 per cent and Newcastle at 4.3 per cent. The other advantage is that property prices are relatively low whilst attracting healthy yields.