Property is still a good investment in the UK, but the best locations are not always so easy to find. Many property investors would think London and the South-East are top areas for buy-to-let properties because of the high demand and high rents. However, the rental yields can be very low, because of the high price of housing. Research by TotallyMoney has uncovered the highest-yielding postcodes in Britain – and none of them are in London or the South-East commuter belt.
The research analysed more than 500,000 properties for sale and to rent in October, and created an interactive map showing the average rents, asking prices for properties and buy-to-let yields for 2,700 different postcode areas. It came up with some interesting results, particularly the fact that the three most profitable postcodes are all in Liverpool. The postcodes L6, L7 and L15 are all top earners for buy-to-let investors. Liverpool’s L7 postcode has a yield of 12.63%, L6 is 10.57% and L15 is 10.29%. This is largely due to the large student population of about 70,000, creating high demand in the city.
Obviously, investors will need to ensure the properties they buy in those postcodes are suitable for students – or lecturers. Larger properties suitable for friends to share will be popular, along with apartments offering extras such as a gym, communal area and good public transport links to the various university campuses. Areas with thriving nightlife, leisure facilities and shops will also appeal to students. Some areas may also have better internet connections than others, so it is definitely worth checking which ones have the best speed or fibre optic lines provided.
Other top university cities including Manchester, Plymouth, Nottingham, Sheffield, Cardiff and Glasgow are also in the top 25 postcodes and have rental yields of more than 7.25%. No London or Home Counties’ postcodes made it into the top 25. London came off particularly badly, with eight of the 25 worst performers being in the capital. The worst yields in London are in N2 at 1.48% and N6 at 1.76%. At the very bottom of the list is BH13 in Bournemouth at 1.41%.
Landlords looking to increase their portfolio are advised to look at investing in those postcode areas which offer the highest yields, as well as to compare the best buy-to-let mortgage rates to make sure they can maximise profits. Interestingly, Liverpool is also one of two northern towns which are set for a boom this Christmas, according to recent reports. The other city is Manchester, which is another thriving university area. Property experts, Ascend Properties, suggest that houses in these two areas could see their properties among the most profitable in the UK.
This boom coincides with an expected slump in property in London and the South. The northern cities are doing well because of their strong economies and a fast-moving market. House prices are still growing in many areas of the UK, with annual house prices growth beating forecasts in October.