The present rental market trend– Increasing rental prices, and rental demand and falling house prices. This is the most ideal market for Buy-to-let properties, but not all BTL investments will see success. One of the critical parameters when considering the best area for property investments, especially Buy-to-let, is the rental yield. A good understanding of the rental growth will allow the landlord to maximise his profits and ultimately see success in his property investment. Zoopla’s most recent survey shows a list of best property investment areas for rental growth in the UK, and here it is…
Zoopla Rental Index, December 2023
According to Zoopla, the average rental growth percentage is 5.49% and BTL house prices are at an average of £262,288. As we can see, the top ten cities have seen an average rental yield increase between 8.50% to 7.07% With Sunderland ranking first, and Grimsby at the bottom of the table. The table above shows BTL property prices well below the estimated average, especially Sunderland, Burnley, and Middlesbrough (in that respective order) with average house prices less than £100k. It can be said that these cities are the most lucrative options to invest in BTL – less purchasing price and high rental yields.
Zoopla also discusses the top ten regions for investing in BTL. Here it is:
Regions occupying the top spots in the table, all have low monthly rent rates. This should not deter property investors from considering these regions, as the prices for the buy-to-let properties in that region is also particularly low, implying that significant profits are still possible here.
These regions have been propelled on to this list as high performing BTL property areas, largely because of the mass regeneration projects, the influx of high number of students and young professionals, and businesses that have created a high demand in the residential market. Certainly, UK has been experiencing spiralling demand in rental market for an extended period, but the pace is slowing down now. Albeit the demand is still higher than the average and there are expectations of house prices to fall further, – rents have witnessed an increase by 9.7% this time around, and 11.9% in the previous year. Although the demand has come down slightly, it is still more than the 5 year average – This bears proof that the BTL property market will continue to be prosperous into the future.
Here is the full report by Zoopla: https://www.zoopla.co.uk/discover/property-news/best-buy-to-let-locations/
Get in touch with ERE property today and explore some of our best Buy-To-Let investment opportunities!
