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TODAY'S OTHER NEWS

UK’s highest yields: the best postcodes for buy-to-let

Despite a number of tax and legislative changes making it harder to make money in buy-to-let, there are still pockets of the country where investors can find decent returns.

The best is the L7 postcode in Liverpool, according to research by Benham and Reeves, where a combination of low property prices, at an average of £105,000, and large student populations equals appealing rental levels, ensuring a rather attractive average rental yield of 10.7%.

This is closely followed by the neighbouring L6 postcode where yields are currently 10.4% with Middlesbrough, Manchester, Bradford, Sunderland, Newcastle, Sheffield and Nottingham also home to some of the best postcodes for the highest rental yields. 

Top UK Postcodes for Rental Yields

Area

Avg yield

Avg price

L7

10.70%

£105,000

L6

10.40%

£85,000

TS1

10.20%

£61,000

M14

10.20%

£163,000

BD1

9.90%

£58,000

SR1

9.70%

£68,000

L5

9.40%

£69,000

NE6

8.50%

£123,000

S2

8.50%

£109,000

NG7

8.50%

£137,000

Marc von Grundherr, director of Benham and Reeves, said: “There are a whole host of factors that mean the rental desirability of a property can literally change from one street to the next but one of the best starting point to work from is the rental yield available. 

“Despite the government’s attempts to dampen the appetite of the sector it remains a lucrative business and for those with the time to commit to it, there are plenty of buy-to-let honey pots out there that will bring a great return on your investment.”

Buy-to-let landlords looking to invest in London will find that the E6 postcode in East London, along with IG11, located a little further east covering Barking, top the charts in terms of rental yields in the capital, with both areas offering a rental yield of 5%.

This eastbound stretch of the capital actually dominates the top 10 most lucrative buy-to-let postcodes in the city, with RM8, RM9 and RM10 also among the best with rental yields of 4.9%.

N18 which straddles the North Circular is one of the only postcodes outside of East London to make the list with a rental yield of 4.8%.

RM13 ranks next with SE28 the only postcode south of the river to appear. E15 and EN3 complete the top 10. 

Top London Postcodes for Rental Yields

Area

Avg yield

Avg price

E6

5.0%

£357,569

IG11

5.0%

£305,965

RM8

4.9%

£319,975

RM9

4.9%

£306,262

RM10

4.9%

£319,077

N18

4.8%

£362,996

RM13

4.8%

£353,392

SE28

4.8%

£291,233

E15

4.7%

£426,876

EN3

4.7%

£355,416

von Grundherr commented: “Of course, London’s more prime postcodes are always a safe bet, attracting investment due to their prestigious image and positioning. While we may have seen some decline in price growth due to political uncertainty, they remain very much in demand from a rental point of view and so for those with the budget to buy there, a return isn’t hard to come by.

“They also offer better capital growth then London’s peripherals and for those not completely dependent on yield but preferring to opt for more long-term growth, inner London is still the go to place to invest in the capital’s buy-to-let market.”

Poll: Do you agree that there are plenty of 'buy-to-let honey pots' out there that will bring a great return on your investment?

PLACE YOUR VOTE BELOW

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