Figures for the top buy-to-let rental yields across the UK

I’ve just come back from another meeting with a HMO landlord who wants me to take over management of his 5 bed HMO in Gillingham Road. An estate agent himself, he knows the property market really well but after losing two tenants, he simply doesn’t have the time to find new ones, complete the reference process, and manage the property going forward. So my HMO specialist management service Home-Share is going to be finding suitable tenants to occupy it. It’s a great property in a desirable area with a strong rental market to tap into.  

On the subject of desirable areas, some new stats have been released by Totally Money on the buy-to-let hotspots across the UK. The team there surveyed 500,000 properties across England, Scotland and Wales to find the areas that offer the highest buy-to-let yields. Although none of the home counties make the top 25 postcodes, the stats are still pretty good with a large percentage of Medway providing a yield between 4.5% – 5.99%, the second highest yield bracket in the survey. Moving into the wider Kent area, Dartford features as having some of the highest yields in the region with a massive 7.06%.

Looking at the bigger picture, the results show that Liverpool’s high student density is providing some great yields, securing the region the top 3 spots in the list of highest yields. With a student population of 70,000+, it’s no surprise the area is dominating the leaderboard. Seemingly the combination of high demand, lower than average house prices and high rents, are a winning combination, with the average yield in Liverpool at a staggering 12.63%.

Unsurprisingly, it is the university cities that take up a large part of the top 25 buy-to-let yields. With a ready-made tenant market, those areas provide landlords with the reassurance that they will get a steady income from their buy-to-let investment. Luckily Medway and Kent has a strong student body itself. The University of Kent had 18,065 full time students across all three of its sites in 2016, but only provided 1,100 units of student accommodation in Medway. Which is low in comparison to the 5,400 provided in Canterbury. And don’t forget, Canterbury Christchurch and University of Greenwich also have campuses in Medway, so there are plenty of students in the area looking for good quality accommodation.

I think the last few months have made investors wary and I understand why. The interest rate rise, stamp duty and buy-to-let tax changes have been influential in making everyone so cautious. However, there are still excellent opportunities to grow your portfolio successfully. The key is making sure you accurately assess the viability and profitability of an acquisition. If you have a potential investment you would like some advice on, I’m always happy to chat property. You can email me at hasan@home-share.co.uk, connect with me via LinkedIn or join our discussion group over on Facebook.

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