Tighter lending criteria, the tenant fee ban, and changes to mortgage tax relief are all making it harder for landlords to turn a profit. But yields don’t have to be small — if you know where to look…
Totallymoney.com looked at 580,000 properties across England, Scotland, and Wales to find the areas that offer the highest buy-to-let yields. The below table shows the top 10 zip codes with highest yields. Still North West is dominating the list with 50% of the Zip codes (3 in Liverpool and 2 in Manchester). Research shows university cities have some of the highest rental yields, with Liverpool, Manchester, Middlesbrough, Newcastle upon Tyne, and Edinburgh shown to be top performers. Due to new students arriving in these cities year after year, there’s no shortage of tenants for landlords to choose from, making void periods very unlikely.
- Liverpool has three universities and a student population of 70,000, making it a hotspot for buy-to-let investors.
- L7 ranks first, with an average rental yield of 11.79%. The postcode covers the city center, Edge Hill, Fairfield and Kensington, and is close to two of Liverpool’s three universities.
- L6 ranks second, with an average rental yield of 11.59%. The postcode covers Anfield, the city centre, Everton, Fairfield, Kensington, and Tuebrook.
- Middlesbrough’s TS1 town centre postcode is home to Teeside University. It has a student population of close to 22,000.
- TS1 ranks third, and has an average rental yield of 10.94%.
- TS1 also has an average asking house price of £65,638, making it one of the more affordable buy-to-let hotspots.
- Edinburgh has a student population of close to 35,000.
- EH8, home to the University of Edinburgh, ranks fourth and has an average rental yield of 10.62%.
- The University of Edinburgh ranks 6th best in the UK, according the Times Higher Education World University Rankings.
- With four universities and a student population of 100,000, it’s not hard to see why Manchester’s rental market is strong.
- M14 ranks fifth overall, with an average rental yield of 10.08%. It covers Fallowfield, Moss Side, Ladybarn, Rusholme, and Victoria Park.
- M14 is home to Manchester Metropolitan University, as well as Fallowfield and Saint Gabriels Hall — campuses for the University of Manchester.
- M19 ranks ninth, with an average rental yield of 8.6%. The postcode covers Levenshulme, Burnage, Heaton Mersey, Heaton Chapel, and Reddish.
Newcastle upon Tyne
- NE6 ranks sixth, with an average buy-to-let yield of 9.48%. It covers Walker, Byker, and Heaton.
- It’s a couple of miles away from Newcastle University, making it a viable buy-to-let hotspot for student accommodation. It has a student population of close to 24,000.