Luton and Colchester have been named among the best places for buy-to-let investors in the existing market, based on rental yields.
The LendInvest BTL Index regularly ranks 105 postcode areas around England and Wales based on a combination of four critical metrics: capital value growth, transaction volumes, rental yield and rental price growth, and based on the latest data Luton reclaims the number one spot for the third time since December 2016.
Romford in Essex and Birmingham continues to present key investment opportunities for buy-to-let landlords, with rental returns marginally higher than Manchester.
Ian Boden, sales director at LendInvest, said: “It’d be so easy to look at the underlying data that tells us transaction volumes are down and make dire predictions about the health and wealth of the rental market.
“Instead, what our Index proves once again is that looking at one metric in the housing market is never enough. One metric on its own can’t clearly define the performance of a city’s property market.
“Each of the very top performing BTL locations this quarter is experiencing a slowdown in transactions - substantial falls in places, dips in others. But, the best places this quarter continue to outperform the competition well thanks to strong performances on other, equally important metrics like rental yield, capital gains and rental price growth.
“Data from the BTL Index, UK Finance and our own experience as a mortgage lender strongly suggests that right now a ‘buy, hold and remortgage’ strategy is some investors’ preference while the market works through a possible slowdown.”
The Top 10 buy-to-let postcodes
| |
Yield
|
Capital gains
|
Rental price growth
|
Transaction volume growth
|
|
Luton
|
3.91%
|
7.29%
|
3.70%
|
-6.15%
|
|
Colchester
|
3.63%
|
6.33%
|
4.77%
|
-6.73%
|
|
Romford
|
4.09%
|
4.99%
|
5.28%
|
-7.84%
|
|
Birmingham
|
4.55%
|
5.00%
|
3.66%
|
-6.46%
|
|
Manchester
|
5.36%
|
4.38%
|
3.71%
|
-7.35%
|
|
Cambridge
|
3.26%
|
4.57%
|
4.76%
|
-6.63%
|
|
Northampton
|
3.99%
|
6.59%
|
2.17%
|
-7.36%
|
|
Bristol
|
3.83%
|
5.51%
|
2.75%
|
-6.20%
|
|
Ipswich
|
3.42%
|
5.77%
|
2.76%
|
-6.16%
|
|
Southend-on-Sea
|
3.62%
|
6.05%
|
2.53%
|
-6.93%
|
The Bottom 10 buy-to-let postcodes
| |
Yield
|
Capital gains
|
Rental price growth
|
Transaction volume growth
|
|
East Central London
|
2.86%
|
-13.86%
|
-0.20%
|
-7.27%
|
|
Durham
|
4.41%
|
-3.03%
|
-2.81%
|
-8.21%
|
|
Cleveland
|
4.23%
|
-2.29%
|
-0.70%
|
-6.58%
|
|
Crewe
|
3.61%
|
-2.30%
|
0.30%
|
-7.45%
|
|
South West London
|
2.89%
|
-0.07%
|
-0.96%
|
-7.94%
|
|
Sunderland
|
5.29%
|
-3.18%
|
-0.77%
|
-6.15%
|
|
West Central London
|
2.61%
|
-1.69%
|
0.87%
|
-6.91%
|
|
Twickenham
|
3.38%
|
2.51%
|
-2.32%
|
-7.33%
|
|
Blackburn
|
4.69%
|
-1.92%
|
0.55%
|
-6.54%
|
|
Lancaster
|
3.79%
|
0.90%
|
-1.52%
|
-6.00%
|
Transaction Volume Growth slowdown
|
LendInvest BTL Index Top 10
|
March 2018
|
July 2018
|
|
Luton
|
2.79%
|
-6.15%
|
|
Colchester
|
1.53%
|
-6.73%
|
|
Romford
|
2.63%
|
-7.84%
|
|
Birmingham
|
1.65%
|
-6.46%
|
|
Manchester
|
3.30%
|
-7.35%
|
|
Cambridge
|
2.33%
|
-6.63%
|
|
Northampton
|
3.51%
|
-7.36%
|
|
Bristol
|
2.81%
|
-6.20%
|
|
Ipswich
|
1.77%
|
-6.16%
|
|
Southend-on-Sea
|
1.88%
|
-6.93%
|
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