x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

What property type has the best yields?

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

Poll: Buy to let: is it still worth it?

PLACE YOUR VOTE BELOW

  • icon

    Glasgow is winning thanks to the SNP loony legislation banning tenants and landlords from agreeing a mutually acceptable length of lease, restricting rent increases to once a year etc. Result is rents are up 33% for the best properties compared to 2016 and landlords can pick and choose their tenants. Rents always go up annually whereas before it tended to be only when tenants left unless they were tenants we didn't want to keep.

    As usual, decent tenants and landlords bear the brunt of legislation that only protects rogue tenants and is ignored by rogue landlords.

  • icon

    Another nonsense data capture.
    A 1 Bed home will 9/10 be leasehold. Exorbitant annual fees (these seem to escape under the Shelter radar) along with renewal costs to renew make these not nearly as good an investment than freehold. The rental millennial's that ran this study have missed out a very important point

    icon

    Buying leasehold is a mugs game.

     
  • Matthew Payne

    1 bed modern flats in my experience, ideally no gas, deliver the best returns and allow entry for far more landlords into the market. Not all service charges are exhorbatant, only down to the quality of the Block Managers, and to some extent the choice of block where the residents take pride in where they live, not the fact that by definition it is leasehold.

    icon

    Yes they are the cheaper property to purchase but when you add the annual lease fees to annual mortgage costs then you would have been best positioned to buy a freehold surely & enjoy the additional rent income?

     
    Matthew Payne

    Hi Jahan, yes and no but there are exceptions to every rule. Yes you will no doubt be able to find me a FH property that works better than a flat in some locations. I have done the matrix for clients thousands of times. The capital outlay on a 2 bed house, compared to a 1 bed flat is far far greater, but the increase in rent doesnt increase by anywhere as much. Yes there are service charges, but they are tax deductible and it includes things like insurance and building maintenance you would have to pay for separately anyway. There is also the argument for spreading your risk and buying more smaller units.

    There is always a glass floor in rents where they stop going down, however small a property gets. Take where I live for example. Typically 1bed flat is £775pcm. 2 bed flat £895pcm, 2 bed house £1000pcm. The 1 bed flat is £200k, the 2 bed flat is £230k, the 2 bed house £350k. There could be an argument for going for teh 2 bed flat based on these numbers, but there will always be more tenants looking for a 1 bed.

     
  • icon

    i have 2 leasehold flats--never againn

    i think that leasehold is next misselling scandal--particularly around retirement properties

    icon

    I've looked at buying leasehold flats in the past, but on reading the lease terms have always decided not to buy.

     
icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up