Buy-to-let investors who want more property for their money than they can get in some areas of the UK, as well as decent yields, would be wise to look at Ireland.
Many property speculators are turning to Ireland as a lucrative alternative to the UK and it has topped the European buy-to-let investment chart for the second year running. On top of this, WorldFirst research shows the average rental yield of an Irish property was 7.08% this year, compared to 6.54% in 2016. In the same period, UK rental yields have fallen from 4.91% to 4%, to become some of the lowest in Europe.
Ireland has one of the fastest-growing economies in the eurozone, which is one reason for the booming rental market, along with its gross domestic product which grew by 5.8% in the 12 months to June 2017. But the time to act is now, because house prices are rising at the third fastest pace in the world. Only Iceland and Hong Kong have prices that are rising faster, according to the Global Property Guide. This boom is reflected in the average rents, which stand at about £12,000 a year in an Irish city. With good rents and yields, landlords are increasingly turning to Ireland, particularly with the tax increases and demands facing UK rental investors. Conversely, the Irish government revoked a cut in mortgage tax relief in 2016, which means investment there is more appealing than in the UK.
For investors wishing to stay in the UK market, the London suburbs are an attractive option. Many buy-to-let landlords are shifting away from central London to the outer boroughs, which are enjoying a thriving graduate rental market. Graduates wishing to make London a long-term place to live are turning away from the central areas, according to peer-to-peer lending platform, Landbay. They are finding it more affordable to live in areas within commuting distance of London, but with lower rents. The cheapest boroughs to live are Bexley, with average rents of £1,004, Havering with rents of £1,125 and Sutton at £1,056. In the central London boroughs, the average rents in Hackney are £1,728 and £1,690 in Southwark, so there are sound financial reasons to move to the outer suburbs. Graduates realise they could be renting long-term, because of the high cost of properties in desirable areas, such as London and the South-East, and so the lower rents in the outer boroughs are looking ever more attractive.
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