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Don’t surrender to poor local yields, urges property guru By Simon Thompson |
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Property investment experts are urging landlords to look away from their local neighbourhoods to earn the biggest returns on their investments.
A new survey of buy to let yields in England and Wales reveals Birmingham is one of the brightest spots for investment, even though rents and property prices are higher in London and the South East.
Property firm Move With Us has analysed rents and property values across England and Wales to come up with a top 10 table of buy to let hot spots (see below).
Birmingham neighbourhoods take three out of the top 10 – Nechells, Aston (B7) is top of the list with a return on investment of 10.6%. Castle Vale (B35) with a gross yield of 9.2% is sixth and the Jewellery Quarter (B18) with a return of 8.7% is ninth.
Despite high rents and surging property prices, London does not figure in the top 10.
That’s because gross yields are worked out by dividing total annual rents received by the property value at the year end. So, a £7,500 a year rent on a £150,000 house is a yield of 5%, but 2.5% on a £300,000 house.
The report took worked out yields for two-bedroomed homes for rent and sale.
Most of the best yields are in towns and cities where young professionals like to live close to work, said the report. Rural areas fare badly for yields because homes are more expensive and tend to be owner-occupied.
Doug Shephard, director at Home.co.uk, who helped compile the data, said: “This study is a route map for investors in search of the highest potential rental yields. Landlords need an open-mind about where to invest and not simply look in their immediate area.
“A highly localised approach identifying the ultimate combination of in-demand property types, lower capital investment and higher rental prices will deliver good yields and fewer voids, and maximise potential returns.”
The highest yields in Wales were 7.5% in the north of Cardiff.
Top 10 Yielding Post Codes in England and Wales
|
Post code |
Gross Yield |
1 |
B7 (Birmingham) |
10.6% |
2 |
TN28 (Kent) |
10.5% |
3 |
L14 (Merseyside) |
9.6% |
4 |
GU6 (Surrey) |
9.5% |
5 |
TS1 (Middlesbrough) |
9.2% |
6 |
B35 (Birmingham) |
9.2% |
7 |
L4 (Liverpool) |
9.1% |
8 |
RH4 (Surrey) |
9.1% |
9 |
B18 (Birmingham) |
8.7% |
10 |
EN8 (Hertfordshire) |
8.7% |
Source: Move With Us
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Landlords warned - prepare for more regulation |
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Landlords in England are being warned that they should prepare for more regulation after the government published a consultation.
The warning comes from Tim Miles who is a partner at law firm Clarke Willmott.
He says that the Government is cons |
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Research reveals that 2017’s rents fell in real terms |
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The rents being paid to landlords in all parts of the UK fell in real terms during 2017, research suggests.
The findings from HomeLet reveal that rents in November rose by 0.7%.
That's the 11th straight month that rent increases have fallen beh |
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Rents for the UK’s rental properties rise by 2.1% |
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The average rent for a buy to let property grew by 2.1% in the year to September, an index has revealed.
The figures from HomeLet show that the average rent now being paid is £927 every month.
For landlords in London, rents rose by 1.9% o |
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Landlords start exiting the buy to let sector |
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One leading firm of letting agents is warning that buy to let investors are beginning to exit the sector.
The warning comes from Belvoir who say that while the numbers of landlords leaving is not huge, there is a trend appearing.
The firm's chi |
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Landlord confidence takes a knock |
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Despite the prospect of high yields and profitability, a survey has revealed the landlord confidence around the UK has fallen.
The findings from BM Solutions looked at all the key indicators for the second quarter of 2017.
They say that the lev |
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Landlords 'don't know what tenants want' |
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Landlords in the private rental sector are out of touch with their tenant’s wants and needs, according to new research.
The findings from an online letting agent revealed that tenants are clear most often about what they want and t |
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