Birmingham Best in UK for BTL Rental Yields
According to a report published by LendInvest, Birmingham has taken pole position as a buy to let investment hotspot, representing the best value for new landlords in Q2 2015.
At the end of the second quarter the data shows landlords in Birmingham, Ipswich, Liverpool and Glasgow are benefitting the most from advantageous rental yields.
LendInvest, who prepared the research gathered data for new tenancies from postcode areas throughout the UK and found four of the 10 highest rental incomes were in Birmingham: B44 yields 13.6% annually, B42 11.9%, B98 10.5%, B23 9.1%. Others in the top 10 were postcodes in Ipswich 10.8%, Liverpool 9% and Glasgow with G34, G21 and G22 yielding 11.9%, 10.1% and 9.2% respectively.
Using 1,000,000 sales and 500,000 rental listings provided by Zoopla, LendInvest took the average asking rental price per year and divided it by the average property asking price to calculate yield and then sorted the numbers according to postcode areas.
The Midlands provides a great investment opportunity
Jane Morris, managing director of Property Let by Us said: "Many landlords tend to invest near to where they live but if they look further afield, they could easily increase their yields and capital growth. The Midlands provides a great investment opportunity as the property is much more affordable than the South East and the yields are high. For example, in Coventry, a three bed semi will cost around £125,000 and will provide rental yields of around 6.57%".
British BTL investments have risen in popularity in the last two years, receiving a further boost earlier this year when changes to pension regulations kicked in, introducing in excess of 200,000 new investors to the market.
UK property markets have been dominated by investors for almost two years amid rising concerns of affordability issues for families struggling to get on the property ladder. According to homeless charity Shelter, 80% of UK homes are unaffordable to a family of renters earning average wages seeking to buy their first property.
In London, the charity identified just 43 properties they classified as 'genuinely affordable' including a houseboat and mobile homes.
A poll conducted by Huffington Post just prior to the May elections revealed that around 19% of private renters in the UK need help from family and friends to pay rent.
In essence, the figures indicate the potential rental yields achievable in certain areas based upon fresh tenancies during the respective quarter. How those figures stack up over the longer term and what is actually received by the landlord in rental income each year, remains open to question.