A new league table has been created of the best places for landlords to invest in buy to let.
The Compare The Market service has looked at how property prices and rental income produce yields, and factoring in the popularity of the locations with renters searching for properties online.
Its weighted results are:
Birmingham - 4.65% yield and 10,500 Google searches in December 2020;
Bradford - 4.52% yield and 7,080 searches;
Coventry - 4.34% and 6,700 searches;
Bolton - 4.67% and 5,720 searches;
Burnley - 6.02% yield and 3,770 searches;
Cardiff - 4.61% yield and 5,700 searches;
Fife - 6.49% yield and 1,900 searches;
Norwich - 4.52% yield and 4,600 searches;
Renfrewshire - 7.31% yield and 590 searches;
Barnsley - 4.33% yield and 4,660 searches;
Exeter - 4.84% yield and 3,780 searches;
South Lanarkshire - 7.03% yield and 480 searches;
Swansea - 4.56% yield and 3,990 searches;
North Lanarkshire - 6.88% yield and 480 searches;
West Lothian - 5.71% yield and 1,900 searches;
Merthyr Tydfil - 5.61% yield and 1,950 searches;
North Ayrshire - 6.73% yield and 320 searches;
Oxford - 3.93% yield and 4,000 searches;
Ipswich - 4.14% yield and 3,620 searches;
Cambridge - 3.31% yield and 4,800 searches.
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The top result nets only 7.3% ? Even Oxford at 3% gets a mention??
I don't know how they weighted their results but there seem to be some glaring omissions to these figures. None of our investors in Merseyside are looking at anything under 8% net and I am just selling one at 11.3% net with long term setting tenants.
Like a lot of these league tables, the results are often skewed for particular reasons that have more to do with what the compiler is selling.
Andrew, I do not disagree with you entirely. But Merseyside is not a good example. A two up two down in an average area in Merseyside, can be purchased for about 80K. Similar property in a similar area in Manchester down the road, will cost you anything between 130 to 170 K. In Stockport a two up two down generates about £8000.00 annually. To purchase such property will cost you anything between 160K to 180K.
Making plenty of money in Nottingham - doesn't even make the list!
A two up two down that was purchased in 2017 for £130 K , is now going for £160 -£170 nowadays. That is your gain.
One thing these surveys seem to ignore is the average purchase price is based on sales of properties ranging from under £100k to over £1 million, whereas the properties rented and rents charged are in a much narrower range.
The yield on particular properties in most popular rental areas is probably nearer 8 to 10%, and in my experience can often exceed 10%.
Once capital growth ( typically 300% or more over the last 20 years for my portfolio) is taken into account, there is still no safer home than btl for my life savings, despite the efforts of Shelter, Generation Rant etc.
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