Buy-to-let rental yields have remained largely flat, increasing by just 0.1% over the past 12 months, according to Sourced Capital.
The research from the peer to peer investment platform reveals that in England, yields have fallen by 0.1%, while regionally, London has seen an even greater decline with a drop of 0.2%.
The North East has seen an annual increase of 0.12% and on a local level, Corby has seen an uplift of 0.7% on an annual basis.
Charnwood, Newcastle and Exeter have also seen positive growth with a jump of 0.5%.
Harlow in Essex and the Orkney Islands have enjoyed a 0.4% increase, along with Ealing which enjoys the largest increase of all London boroughs.
While Glasgow has seen a very marginal decline on an annual basis, the current average rental yield of 7.87% remains the strongest in the UK buy-to-let sector.
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Top line rental yield and annual increase |
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Location |
2019 (Q1) |
2020 (Q1) |
Change (2019 to 2020) |
|
North East |
4.97% |
5.09% |
0.12% |
|
East Midlands |
3.90% |
3.93% |
0.03% |
|
West Midlands |
4.01% |
4.03% |
0.02% |
|
North West |
4.53% |
4.55% |
0.02% |
|
Wales |
4.0% |
3.9% |
0.00% |
|
Yorkshire and The Humber |
4.53% |
4.52% |
-0.01% |
|
South East |
3.73% |
3.71% |
-0.01% |
|
Scotland |
5.9% |
5.9% |
-0.02% |
|
East of England |
3.60% |
3.55% |
-0.05% |
|
South West |
3.83% |
3.78% |
-0.05% |
|
Northern Ireland |
5.4% |
5.4% |
-0.10% |
|
London |
4.32% |
4.10% |
-0.22% |
|
England |
4.1% |
4.1% |
-0.08% |
|
United Kingdom |
4.9% |
4.8% |
0.10% |
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Inverclyde, West Dunbartonshire, Midlothian and East Ayrshire also remain some of the most profitable pockets, while outside of Scotland, Burnley, Belfast and Blackpool also rank well.
Stephen Moss, managing director of Sourced Capital, said: “Turning a profit in the buy-to-let sector remains a tough ask with a number of government changes denting profitability and yields remaining largely flat.
“With COVID-19 presenting additional hurdles such as rental arrears and longer void periods, many are now turning to alternative options such as the peer to peer sector for a safer, more hands-off investment.
“However, that’s not to say that a buy-to-let property won’t make a great investment should you place your money in the right pockets of the market. Buy-to-let returns are based on fine margins and so an annual increase of 0.7% isn’t as insignificant as it may seem.”
|
Location |
2019 (Q1) |
2020 (Q1) |
Change (2019 to 2020) |
|
Corby |
3.84% |
4.52% |
0.68% |
|
Charnwood |
2.99% |
3.53% |
0.53% |
|
Newcastle upon Tyne |
5.08% |
5.60% |
0.52% |
|
Exeter |
5.04% |
5.52% |
0.47% |
|
Harlow |
4.14% |
4.51% |
0.38% |
|
Orkney Islands |
4.81% |
5.17% |
0.36% |
|
Ealing |
3.71% |
4.07% |
0.35% |
|
Lincoln |
4.49% |
4.84% |
0.35% |
|
Liverpool |
4.78% |
5.13% |
0.34% |
|
West Oxfordshire |
3.88% |
4.17% |
0.29% |
|
Barrow-in-Furness |
5.21% |
5.50% |
0.29% |
|
Merton |
3.63% |
3.90% |
0.27% |
|
King’s Lynn and West Norfolk |
3.73% |
3.99% |
0.25% |
|
North Lincolnshire |
3.94% |
4.20% |
0.25% |
|
Fylde |
3.80% |
4.04% |
0.24% |
|
Rushcliffe |
3.13% |
3.35% |
0.23% |
|
Swale |
3.93% |
4.15% |
0.22% |
|
Sefton |
4.09% |
4.30% |
0.21% |
|
City of Aberdeen |
5.92% |
6.12% |
0.20% |
|
Lambeth |
4.14% |
4.34% |
0.20% |
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Locations with the highest current rental yield |
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|
Location |
2019 (Q1) |
2020 (Q1) |
Change (2019 to 2020) |
|
City of Glasgow |
7.90% |
7.87% |
-0.03% |
|
Inverclyde |
7.27% |
7.36% |
0.09% |
|
West Dunbartonshire |
7.05% |
6.83% |
-0.22% |
|
Midlothian |
6.97% |
6.83% |
-0.14% |
|
East Ayrshire |
6.50% |
6.62% |
0.11% |
|
Burnley |
6.57% |
6.46% |
-0.11% |
|
Na h-Eileanan Siar |
6.25% |
6.27% |
0.02% |
|
City of Dundee |
6.38% |
6.24% |
-0.14% |
|
Belfast |
6.54% |
6.23% |
-0.32% |
|
Clackmannanshire |
6.25% |
6.20% |
-0.05% |
|
Falkirk |
6.48% |
6.18% |
-0.30% |
|
City of Aberdeen |
5.92% |
6.12% |
0.20% |
|
North Ayrshire |
5.90% |
6.09% |
0.19% |
|
Blackpool |
5.96% |
5.99% |
0.03% |
|
Renfrewshire |
6.14% |
5.98% |
-0.16% |
|
Moray |
5.87% |
5.95% |
0.09% |
|
South Lanarkshire |
5.86% |
5.90% |
0.04% |
|
County Durham |
5.77% |
5.90% |
0.12% |
|
Hyndburn |
5.93% |
5.78% |
-0.14% |
|
North Lanarkshire |
5.84% |
5.74% |
-0.10% |
