New data from lettings management platform offers fresh insight into which property types produce the best yields for investors.
The study found that one-bedroom properties are now proving the best financial investment when it comes to buy-to-let rental yields across the UK’s major cities.
One-bedroom homes now average a rental return of 6.2%, while two-bedroom properties provide a yield of 5.6%.
Meanwhile, three-bedroom properties, which previously offered the highest returns, now provide a rental yield of 4.3%.
When it comes to investing in a one-bedroom buy-to-let, Newcastle offers the highest return, with an average yield of 7.9%, closely followed by Glasgow at 7.7%, Liverpool at 7.1% and Plymouth at 7%.
Newcastle and Glasgow also rank along with Belfast at 6.9% as the best spots for a two-bed buy-to-let investment, with Sheffield (6.7%) and Leeds (6.4%) also proving profitable.
When it comes to three-bedroom properties, Glasgow tops the table at 6.9% among Newcastle, Belfast, Leeds and Liverpool.
Calum Brannan, founder and CEO of Howsy, commented: “We’re seeing a lot of changes to traditional property trends across the sector and the latest seems to be the profitability of the three-bed buy-to-let.
“While still a good investment, on the whole, tenants demand is growing for one and two-bed homes that provide them with a space of their own.
“This growing demand is leading to one and two-bed properties climbing the ranks of profitability due to their lower investment price point and higher demand pushing up rental prices.
“As the threat of the Coronavirus reduces, we will no doubt see this trend reverse as people begin to again feel comfortable about shared living and the better social lifestyle this brings.”
Rental yields – 1-bed |
|
Location | 1 Bedroom |
Newcastle | 7.9% |
Glasgow | 7.7% |
Liverpool | 7.1% |
Plymouth | 7.0% |
Sheffield | 6.7% |
Leeds | 6.6% |
Leicester | 6.6% |
Nottingham | 6.6% |
Swansea | 6.6% |
Portsmouth | 6.4% |
Aberdeen | 6.3% |
Newport | 6.2% |
Manchester | 6.0% |
Cardiff | 6.0% |
Oxford | 5.8% |
Belfast | 5.6% |
Bournemouth | 5.5% |
Southampton | 5.4% |
Cambridge | 5.4% |
Birmingham | 5.4% |
Bristol | 5.3% |
Edinburgh | 5.2% |
London | 4.7% |
|
|
Average | 6.2% |
|
|
Rental yields – 2-bed |
|
Location | 2 Bedroom |
Belfast | 6.9% |
Glasgow | 6.9% |
Newcastle | 6.9% |
Sheffield | 6.7% |
Leeds | 6.4% |
Liverpool | 6.3% |
Nottingham | 6.0% |
Swansea | 5.9% |
Portsmouth | 5.8% |
Aberdeen | 5.5% |
Manchester | 5.5% |
Birmingham | 5.4% |
Newport | 5.4% |
Leicester | 5.3% |
Cambridge | 5.1% |
Cardiff | 5.1% |
Plymouth | 5.1% |
Edinburgh | 5.1% |
Oxford | 5.0% |
Southampton | 4.9% |
Bristol | 4.8% |
London | 4.2% |
Bournemouth | 4.0% |
|
|
Average | 5.6% |
|
|
Rental yields – 3-bed |
|
Location | 3 Bedroom |
Glasgow | 6.9% |
Newcastle | 6.4% |
Belfast | 6.0% |
Leeds | 5.9% |
Liverpool | 5.7% |
Aberdeen | 5.6% |
Manchester | 5.5% |
Swansea | 5.3% |
Edinburgh | 5.0% |
Nottingham | 5.0% |
Birmingham | 5.0% |
Sheffield | 5.0% |
Portsmouth | 4.9% |
Bristol | 4.6% |
Oxford | 4.5% |
Southampton | 4.5% |
Cardiff | 4.5% |
Newport | 4.4% |
Plymouth | 4.3% |
Leicester | 4.1% |
Cambridge | 3.9% |
London | 3.9% |
Bournemouth | 3.0% |
|
|
Average | 5.0% |
|
|
Rental yields – 4-bed |
|
Location | 4 Bedroom |
Glasgow | 6.9% |
Edinburgh | 6.4% |
Leeds | 4.8% |
Newcastle | 4.7% |
Bristol | 4.7% |
Belfast | 4.4% |
Aberdeen | 4.4% |
Liverpool | 4.4% |
Birmingham | 4.3% |
Manchester | 4.3% |
Nottingham | 4.0% |
Southampton | 3.9% |
Portsmouth | 3.9% |
London | 3.8% |
Leicester | 3.7% |
Cardiff | 3.7% |
Sheffield | 3.6% |
Newport | 3.6% |
Oxford | 3.5% |
Cambridge | 3.5% |
Plymouth | 3.4% |
Swansea | 2.9% |
Bournemouth | 1.8% |
|
|
Average | 4.1% |
|
|
Rental yields – 5-bed+ |
|
Location | 5 Bedroom |
Glasgow | 5.5% |
Edinburgh | 5.1% |
Southampton | 4.3% |
Birmingham | 4.2% |
Nottingham | 3.9% |
Aberdeen | 3.9% |
Liverpool | 3.8% |
Manchester | 3.5% |
Bristol | 3.4% |
Newcastle | 3.2% |
Portsmouth | 3.2% |
Leeds | 3.2% |
Leicester | 3.1% |
Cambridge | 3.1% |
Sheffield | 3.0% |
Swansea | 3.0% |
Belfast | 3.0% |
Cardiff | 3.0% |
London | 3.0% |
Plymouth | 2.6% |
Newport | 2.5% |
Oxford | 2.1% |
Bournemouth | 1.6% |
|
|
Average |
