The best area for buy to let is in Luton where landlords are enjoying yields of 4.8%, according to an index.
The latest LendInvest report on the UK's buy to let market has found that the country's top 10 areas are all in South East, with the exception of Northampton.
The report reveals that Luton’s landlords also enjoyed rent rises of nearly 10% to achieve the largest gain in the country.
The third best area for rent increases is Enfield in North London but it saw the largest capital gains in the country of 17.4%.
Stevenage takes second place for rent increases
Stevenage takes second place for rent increases with an impressive 8.95% and Northampton is in fourth spot with 8.3% and Dartford is in fifth place with 7.98%.
The top 10 is made up of Southend on Sea, Romford, Chelmsford, Southall, Twickenham.
LendInvest's chief executive Christian Faes said: “There are a number of different factors for investors to consider before buying property.
“The main one is value since investors want to buy a property that will increase in value during their ownership and the prospects for price growth is good.”
He added that the UK is still not building enough new homes and that the index points to the best capital value growth occurring in the South East where it is significantly higher than anywhere else in the country.
Paying the most in letting agent fees
Another survey has also revealed where landlords in the UK are paying the most in letting agent fees.
Urban.co.uk says that the towns with the highest tenant fees are: Basingstoke with £621; Slough on £543; Cirencester with £535, Reading with £530 and Alnwick with £530.
However, the cheapest towns for letting agent fees are: Harbrough with £136; Worksop on £139; Market Harborough with £153; Lees on £162 and Newham with £164.
The survey also revealed discrepancies in fees with people being charged £200 to change a name on the tenancy agreement and £90 for a Saturday move-in.
UK needs more professional landlords
Meanwhile, a mortgage lender says the UK needs more professional landlords.
Paragon Mortgages says there has been a fall in buy to let completions in the 12 months to September but, the firm believes, the market will soon pick up.
They say that with growing demand, more rental properties are needed.
Paragon's director of mortgages, John Heron, said the UK's buy to let sector 'still has potential' though landlords are facing a variety of issues in the months ahead.
