When it comes to influencing rental yields, the right investment choice is very crucial. Whilst this may be something obvious that every property investor out there should realise, this becomes even more vital especially if one were to consider the present state of the property market.
Whilst the past three years have seen a rise in the house prices in the UK by 17%, investors in buy-to-let schemes have one seen the average rents increase by 4.7% for the same period. This means that when it comes to money-making more are actually getting it from the capital appreciation of the property rather than the income derived out of renting it out.
Location still remains a foremost factor in how likely successful a buy-to-let property investment is. Recent data shows that Burnley in Lancashire offers the best yields annually. Average houses cost a mere £76,300. Meanwhile, rents are expected to bring in an average of £5,388. This equals to a monthly yield of 7.1%, which is a rather impressive figure.
According to property specialist Experience Invest, the original purchase price really holds the key to determining how good the resulting yields are. Most investors in the buy-to-let scheme tend to limit their spending to £125,000. This is a good thing especially since going beyond these figures would only mean that the yield may no longer be as good.
Purchase price should be looked at as a major factor. There are areas that can attract some really good monthly rent too. When done right, investors can even enjoy as much as 7% to 10% monthly yields.
Other top performers include Belfast and Glasgow. In Belfast, buy-to-let landlords, on average, achieve 6.4% of monthly rental yields. It is even higher in Belfast where landlords are able to clock in average rental yields of 6.9% every month. These are quite astounding figures especially if one were to compare this with the 3.6% that is the national average.
Meanwhile, in the capital, the yields are only 4.4% on average. This is despite the fact that London tends to be quite above the national average. It is also known for properties that are quite restrictively high for a lot of buyers. The figures have remained dismal despite the rental industry bringing in over £20,000 for most landlords.
Yields are even lower in the East of the country. Here, homes are valued at an average £289,000. However, the yields were only at a meagre 3.5%. Meanwhile, in the north, properties are usually priced significantly lower. As a result, more and more investors are looking towards Liverpool, Leeds, Manchester, Sheffield, as well as other surrounding areas. These are the places that are considered as the emerging markets in the country that can offer the highest yields. With more and more young professionals relocating to these cities for a more balanced life outside of the capital, the demand for rental properties will only continue to increase, which could, in turn, create better yields in the process. Learn more about the property market by reading about Experience Invest online.