Britain's highest rental yields: the top 10 postcodes for buy to let

Britain's highest rental yields: the top 10 postcodes for buy to let

The huge rush to acquire buy-to-let property in the first quarter of the year ahead of the stamp duty change deadline at the start of April, after which a 3% surcharge was added for second homebuyers and buy-to-let investors, illustrated the growth in popularity of buy-to-let property as an attractive investment at a time of low interest rates and volatile stock markets.

The buy-to-let boom of recent years has fed the stereotype that Britons are obsessed with property. Ever since Margaret Thatcher declared her belief in a 'property-owning democracy' and introduced Right to Buy in 1980, the UK was converted into a country that saw houses as something to make money from, not just to live in.

Having long provided mega double-digit returns for investors, investment in buy-to-let has outperformed all major asset classes in recent years, with total annual returns from buy-to-let property hitting 12% in 2015 or £21,988 in absolute terms. But where are the best (and worst) rental yields currently achievable? 

The new TotallyMoney Buy-to-Let Yield Map highlights the UK's buy-to-let hotspots providing both an interesting insight into the market and a useful tool for buy-to-let landlords.

The research, which analysed 137,955 rental properties and 303,822 properties that were marketed for sale online on the 1st of October 2016, reveals a clear geographical divide between the North and the South of the country with northern regions coming out on top and The South East showing particularly poorly.

Nine out of the 10 highest yielding postcode districts are in Scotland and the North/Midlands regions.

The 10 lowest yielding postcodes, with the exception of Edgbaston and Holland Park in Birmingham, are all in Greater London, the South East and the South Coast.

The winning postcodes:

 Postcode- Post Town-Coverage-Average Rent Average House Price Yield 
1LS6LeedsBeckett Park, Burley, Headingley, Hyde Park, Meanwood, Woodhouse£1,044£116,11510.79%
2BD1BradfordBradford City Centre, Little Germany, Goitside, Longlands£552£64,10810.33%
3YO1YorkCity Centre£1,876£231,3889.73%
4PR1PrestonCity Centre, Avenham, Broadgate, Deepdale£952£125,8109.08%
5TS1MiddlesbroughTown Centre£523£69,3689.05%
6L7LiverpoolCity Centre, Edge Hill, Fairfield, Kensington£720£99,1148.72%
7M3ManchesterCity Centre, Deansgate, Castlefield£1,230£177,5468.31%
8S1SheffieldSheffield City Centre£823£118,8618.31%
9HD1HuddersfieldHuddersfield Town Centre, Hillhouse, Lockwood, Marsh£656£101,5367.75%
10CF24CardiffCardiff South, Rumney & Trowbridge£1,220£192,5487.60%


... and the losing postcodes:

 Postcode-Post Town-Coverage-Average Rent Average House Price Yield 
867BR2BromleyHayes, Shortlands, Bickley, Bromley Common, Keston£1,300£788,2931.98%
868N21LondonWinchmore Hill, Bush Hill, Grange Park£1,339£825,7001.95%
869HA6NorthwoodNorthwood, Northwood Hills, Moor Park£1,732£1,103,6451.88%
870B15BirminghamEdgbaston, Lee Bank£1,013£656,4121.85%
871W8LondonKensington, Holland Park£4,920£3,320,1161.78%
872RG8ReadingGoring, Streatley, Pangbourne, Whitchurch-on-Thames£1,225£865,4541.70%
873N2LondonEast Finchley, Fortis Green, Hampstead Garden Suburb£3,764£2,733,6401.65%
874BH14PooleLower Parkstone, Lilliput, Penn Hill£1,288£1,000,7951.54%
875N6LondonHighgate, Hampstead Heath£2,779£2,418,3051.38%
876BH13PooleCanford Cliffs, Sandbanks, Branksome Park£1,574£1,668,6411.13%


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