Glasgow is pictured above; one of the cities offering the best return for reward on buy-to-let properties.
Buy-to-let landlords might want to consider moving to Scotland after a report from Zoopla has revealed that the country offers the greatest returns in the UK for buy-to-let investments.
Zoopla has calculated the gross yield on buy-to-let properties by dividing the average yearly income by the property purchase price and taking the percentage. The study analyses the prices and median rents drawn from two bed houses and, while the results deviate slightly from other similar reports, it gives a rough outline of the market’s current state.
Gross Yield (%) | Median 2 Bed Rent (£PCM) | 2 Bed Capital Value (£) | |
Middlesbrough | 7.7 | 450 | 69,950 |
East Ayrshire | 7.7 | 450 | 69,995 |
North Ayrshire | 7.7 | 450 | 70,000 |
Inverclyde | 7.7 | 476 | 74,500 |
Glasgow | 7.6 | 792 | 125,000 |
Stirling | 7.5 | 749 | 120,000 |
Sunderland | 7.4 | 493 | 80,000 |
County Durham | 7.4 | 428 | 69,500 |
Nottingham | 7.3 | 792 | 130,000 |
Hartlepool | 7.3 | 424 | 69,950 |
https://www.zoopla.co.uk/discover/property-news/best-buy-to-let-locations/
The report shows that five of the top ten locations are in Scotland with Ayrshire, Inverclyde and Glasgow doing particularly well. Other sources have confirmed that this is the case, showing that Scottish yields average at 5.8% while English yields have settled at 4.1% (0.1% over the UK average).
Speculators have offered different reasons for why the Scottish market is so lucrative and have suggested that lower house prices in the north as well the concentration of top universities have opened the door for landlords and new tenants.
The least desirable locations are in the South and it makes sense that that landlords based in London, Wales and the South-West, where yields are lowest, are least likely to expand their property portfolio.
The very bottom is skewed by Central London where the high price of land and property (often well over £1 million) skew the ratios, making buy-to-let rentals unviable for those without a large sum of cash to invest. That being said, property in outer locations such as Dagenham, Barking, East and West Ham can reward savvy investors.
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