The highest yielding areas for buy-to-let property in the UK
| Region | Average gross yield | Average monthly rent | Average price of a buy-to-let property |
|---|---|---|---|
| North East | 7.2% | £649 | £109,000 |
| Scotland | 7.1% | £748 | £127,000 |
| North West | 6.3% | £795 | £151,000 |
| Northern Ireland | 6.2% | £744 | £143,500 |
| Yorkshire and the Humber | 6.1% | £758 | £150,000 |
| Wales | 6.0% | £814 | £163,500 |
| West Midlands | 5.6% | £852 | £182,500 |
| East Midlands | 5.5% | £816 | £178,000 |
| South West | 5.0% | £1,016 | £242,500 |
| East of England | 5.0% | £1,111 | £266,500 |
| South East | 5.0% | £1,254 | £301,000 |
| London | 4.7% | £2,053 | £522,000 |
Zoopla Rental Market Report for September 2023 (data to July 2023)
The 10 highest yielding rental cities in the UK
When it comes to cities, you’re generally better off focusing your search in the North of England if you’re after a high yield.
In Sunderland, the average rental property costs a little over £80,000, meaning a high 8.39% gross yield with a £582 rental rate.
Burnley, Liverpool and Blackburn are top investor cities in the North East while Dundee and Glasgow are buy-to-let hotspots in Scotland.
| City | Average gross yield yield | Average monthly rent | Average price of a buy-to-let property |
|---|---|---|---|
| Sunderland | 8.39% | £582 | £83,000 |
| Dundee | 7.85% | £768 | £117,500 |
| Burnley | 7.73% | £530 | £82,000 |
| Glasgow | 7.73% | £898 | £139,500 |
| Middlesbrough | 7.53% | £578 | £92,000 |
| Liverpool | 7.21% | £764 | £127,000 |
| Blackburn | 7.12% | £622 | £105,000 |
| Hull | 7.03% | £578 | £98,500 |
| Grimsby | 6.92% | £579 | £100,500 |
| Newcastle | 6.89% | £763 | £133,000 |
Zoopla Rental Market Report, September 2023 (data to July 2023)
The highest yielding areas in each region of the UK
Looking for a buy-to-let property near where you live? It can be useful as you know the local area and can work closely with a local letting agent.
So you might want to consider which parts of your region offer the greatest rental yield. Here are the top 3 local authorities for yields in each UK region.
East Midlands
Nottingham - 6.8% gross rental yield
Boston - 6.34% gross rental yield
Mansfield - 6.36% gross rental yield
East of England
Great Yarmouth - 5.93% gross rental yield
Peterborough - 5.93% gross rental yield
Fenland - 5.92% gross rental yield
London
Barking and Dagenham - 5.81% gross rental yield
Newham - 5.56% gross rental yield
Bexley - 5.38% gross rental yield
North East
Sunderland - 8.39% gross rental yield
Middlesbrough - 8.16% gross rental yield
Hartlepool - 8.01% gross rental yield
North West
Burnley - 8.11% gross rental yield
Barrow-in-Furness - 7.43% gross rental yield
Liverpool - 7.32% gross rental yield
Scotland
West Dunbartonshire - 9.05% gross rental yield
Renfrewshire - 8.96% gross rental yield
East Ayrshire - 8.58% gross rental yield
South East
Southampton - 6.16% gross rental yield
Portsmouth - 6.05% gross rental yield
Gosport - 5.93% gross rental yield
South West
Gloucester - 6.01% gross rental yield
Plymouth - 5.98% gross rental yield
Swindon - 5.80% gross rental yield
Wales
Blaenau Gwent - 7.25% gross rental yield
Merthyr Tydfil - 6.94% gross rental yield
Neath Port Talbot - 6.89% gross rental yield
West Midlands
Stoke-on-Trent - 6.90% gross rental yield
Coventry - 6.28% gross rental yield
Newcastle-under-Lyme - 6.22% gross rental yield
Yorkshire and the Humber
Hull - 7.03% gross rental yield
North East Lincolnshire - 6.92% gross rental yield
Bradford - 6.86% gross rental yield
Understanding Rental Yield
- Definition of Rental Yield:
Rental yield is a measure that calculates the annual return from a rental property as a percentage of its cost. The gross yield considers the property's cost and rental income, while the net yield takes into account additional expenses such as maintenance and management. - Importance of Rental Yield:
Rental yield is crucial for investors to assess the viability of a property investment. It helps determine if the rental income is sufficient to cover expenses and potential unforeseen costs, such as repairs or vacancies. - Factors to Consider Beyond Yield:
When evaluating a buy-to-let property, it is important to consider factors beyond rental yield. While a high yield may initially seem attractive, other factors like property value appreciation and tenant demand should also be taken into account to ensure a successful investment.
Calculating Gross Rental Yield:
To calculate the gross rental yield, divide the annual rent by the property value, and then multiply by 100. For example, if a property is valued at £200,000 and generates an annual rent of £12,000, the gross yield would be 6%.
(Annual rent / property value) x 100 = gross rental yield
Calculating Net Rental Yield:
To calculate the net rental yield, deduct the annual costs (including mortgage payments, agency fees, property maintenance, and regulatory expenses) from the annual rental income. Then divide the result by the property value and multiply by 100. For instance, if the same £200,000 property generates £12,000 in annual rent but incurs £3,600 in expenses, the net yield would be 4.2%.
[(Annual rent - annual costs) / property value] x 100 = net rental yield
By considering the net rental yield, investors gain a clearer understanding of the actual return on investment after accounting for various costs and expenses.
Subscribe to our Newsletter
No spam. Just the latest news and updates in your inbox every week.
Share:
OTHER NEWS & Updates
Overseas Investors in UK Property: Everything You Need To Know
The UK property market captivates foreign investors due to its enduring stability, transparent operations, and investor safeguards. These factors, coupled with exceptional yields and growth prospects, make it an attractive destination for overseas investors.
Property Investment: Off-Plan Vs. Complete
If you're considering entering the realm of property investment but find yourself undecided between purchasing an off-plan property or a completed one, it's a crucial decision that carries its own set of advantages and potential drawbacks.
