Where are buy-to-let investors seeing the biggest yields?

Monday 20th May 2013

Buy-to-let investors looking for residential properties in the UK which offer the best returns on their investment, at an average gross yield of 6.7%, may wish to consider acquiring property in Wales, according to the latest data from the Countrywide lettings index.

Barratt Homes in South Wales, is one of a number of house builders to have seen increased investor activity in recent months, supporting the region as a buy to let hotspot.

Richard Lawson, sales director from Barratt Homes in South Wales, said: “We have seen an increasing number of landlords looking for properties to buy in South Wales with homes in Swansea and the Rhondda proving particularly popular.’’

Lawson said that one- and two-bedroom apartments are proving particularly popular with first-time investors and those who are building up their portfolio.

“Investors are looking for properties which are easy to let, don’t need any maintenance and provide a good return on their investment,’’ added Lawson.

The Countrywide research, which analyses 50,000 rental properties in England, Scotland and Wales, said that the average rents in the three nations have now risen for six successive months.

Nick Dunning, group commercial director at Countrywide, commented: “Based on current figures, buy-to-let property investments remain a strong performer against savings and other vehicles of investment with the highest yields being achieved in Wales, the Midlands and the North.”

Mr Dunning said that with more people now renting for longer, as many people save for a deposit to buy their first home, there is a rise in the volume of young families looking to rent cheaper accommodation, hence the increase in demand for smaller rental properties.

Rents are lowest in Scotland with an average income of £604 per month in the country. Scottish rental properties also suffered the highest level of arrears at 9.5%, well ahead of the 6.4% national average.

In stark contrast, inner London recorded the lowest yields at 4.6% but the centre of the capital managed an average rental income of £2,371, the highest in the country.

Unsurprisingly, Outer London and the South East were the next most expensive areas with average rents of £1,106 and £1,063 respectively.

"These trends are expected to continue which encouraging for both current and potential investors," added Dunning.

A separate report compiled by Move with Us reveals that advertised rents in London increase for first time since October 2012, reaching an average of £2,182 per month in April, with further improvements expected. Increases in the London rental market are significant as it is a key determinant of the national average and has recently performed poorly.

Robin King, Director of Move with Us, commented: “There are several regions such as Greater London and East Anglia that could potentially see continued upward changes in advertised rental prices by the end of the quarter.”


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