Where Landlords can Achieve the Highest Rental Yields in the UK

Some buy-to-let landlords are preparing themselves for dwindling profits over the next few years, as a result of the Government’s mortgage interest tax relief changes. But solid returns are still achievable, if you look to the locations with the highest rental yields in the UK…

Peer-to-peer lender Kuflink has assessed the average rental yield in 50 major towns and cities across the UK, finding that properties in Salford in the North West of England typically offer the highest rental yields in the UK, at an average of 7.08% in the first quarter (Q1) of the year.

This was followed by Leeds, Manchester and Coventry.

Unsurprisingly, London is among the bottom locations, given the high cost of buying property in the region. Average returns in the capital are just 3.45%. But it is Chelmsford in Essex that provides the weakest yields, at an average of just 2.89%.

Overall, rental yields in Q1 2017 remained broadly stable across the UK, with the gap between returns in the north and south closing.

The CEO of Kuflink, Tarlochan Garcha, says: “This index shows that savvy investors should look to the regions where strong rents and more affordable house prices make for fruitful investment opportunities. The Northern Powerhouse is leading the way, while London falls by the wayside, as rents fail to keep up with rocketing house prices.

“The stability of both house prices and rents is a positive sign for buy-to-let investors, proving the strength of the UK’s property market, which is able to withstand the uncertainty surrounding the UK’s exit from the EU.”

He adds: “The following few months will be the true test of the market, as Article 50 negotiations get underway.”

Are you looking for the highest rental yields in the UK? Here are the locations you should invest in:

1. Salford, North West – 7.08%
2. Leeds, Yorkshire – 5.96%
3. Manchester, North West – 5.79%
4. Coventry, West Midlands – 5.64%
5. Belfast, Northern Ireland – 5.46%
6. Portsmouth, South East – 4.92%
7. Birmingham, West Midlands – 4.90%
8. Edinburgh, Scotland – 4.88%
9. Durham, North East – 4.85%
10. Fife, Scotland – 4.54%

The following towns and cities provide the lowest average rental yields:

1. Chelmsford, East of England – 2.89%
2. Cambridge, South East – 3.17%
3. York, Yorkshire and the Humber – 3.17%
4. Chester, North West – 3.28%
5. Doncaster, Yorkshire and the Humber – 3.38%
6. Derby, East Midlands – 3.41%
7. Wigan, North West – 3.44%
8. Wolverhampton, West Midlands – 3.44%
9. London – 3.45%
10. Carlisle, North West – 3.47%