Over 800 buy to let landlords have been questioned in a survey, which aims to establish the locations which landlords feel provide the best investment opportunities for rental properties in 2020.
The study, which was undertaken by Simply Business, the provider of insurance for landlords, has shown that Manchester and London are the cities which landlords predict will provide the best yields for buy to let properties this year.
Combined together, the two cities received more than a third of the votes, receiving 18 per cent each, respectively, when landlords were asked which city will represent the best opportunity for investment.
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The buy to let market in Manchester is buoyant, thanks to the large student population in the city, as well as its burgeoning media scene. In contrast, London still appears to provide opportunity for capital growth, despite a dip in property prices in the capital during 2019. In the past year, house prices fell by an average of 1.8 per cent.
The study also suggests that buy to let landlords believe that prosperity from the sector will be well dispersed across all regions within the UK this year. After Manchester and London jointly earned first place, Birmingham and Liverpool were awarded joint second place. Birmingham and Liverpool both earned 10 per cent of the vote from landlords when analysing where they were considering to make their next investment during the forthcoming year.
The Scottish capital, Edinburgh, was placed third by landlords, in terms of offering the best investment opportunities. Earning fourth and fifth place were Bristol and Leeds, with historic Oxford coming in sixth place. Another Scottish city earned seventh place, with Glasgow promising good potential yields for landlords in the buy to let market.
Welsh capital Cardiff was awarded eighth place by buy to let landlords, with Southampton coming in ninth place in the UK for potential investment opportunities. Northern city Sheffield completed the list in tenth place.
Simply Business’ chief operating officer, Bea Montoya, emphasised the importance of buy to let landlords, explaining how crucial they are to the economy in the UK. According to the latest statistics, buy to let landlords contributed a massive £16.1 billion, which was generated by pre-tax spending.
Ms Montoya also stated that the sector now houses around 20 per cent of households within the UK, with the industry maintaining a huge presence across the country. She states that it is very encouraging that buy to let landlords view attractive areas for investment this year within a broad spread of different regions up and down the UK.
She also notes that the capital usually reaches top spot for being the most costly city for investing in buy to let property in the UK. However, with a fall in house prices, London has become an attractive location for investing in property once again.
According to this research from Simply Business, approximately one-quarter of buy to let landlords plan to sell a minimum of one rental home in 2020. They claim that this is largely due to the government’s reform of the private rented sector and changes to tax. Therefore, it is reassuring to see landlords are continuing to contemplate investment opportunities across the UK.