Sheffield tops the pile for buy to let gross yields

Sheffield city centre offers the highest gross yields in the UK according to new research, providing buy to let investors with the best available returns.

A gross yield of 11.06 per cent in the Steel City was the highest recorded from more than 2,600 UK postcodes.

Comparison website TotallyMoney found that there was only one other region in the UK with gross yields of ten per cent or more – Aberdeen, with a yield of 10.43 per cent.

An average figure for the whole of the UK stands at 4.17 per cent, with the figures calculated by dividing
the median annual rent by the median asking price in any given location.

Importantly for buy to let investors though, the figures do not take account of tax liabilities, mortgage repayments and maintenance costs – all factors that will eat in to potential returns.

However, rising rents and a wide selection of mortgage deals are providing more options for landlords, helping to boost profits.

A rise in interest rates could alter the state of the buy to let market, but many lenders are still launching products to entice investors, with indications suggesting a rise is still some way off.

Bradford was the third best location in the country with a gross yield of 9.18 per cent before any costs are taken into account.

South Manchester, North Southampton and York also feature highly on the list, thanks in part to their close proximity to major universities.

Manchester saw the highest gross yields of 8.71 per cent, while Southampton and York were just behind, with gross yields of 8.62 per cent and 8.61 per cent respectively.

Other notable locations included Greenock in Renfrewshire and South Aberdeen, both with yields of more than eight per cent, while north-east Glasgow and Paisley (also in Renfrewshire) had gross yields of 7.9 per cent and 7.85 per cent.

At the opposite end of the scale, London saw some of the lowest available gross yields, with South Kensington having gross yields of just 1.56 per cent.

Other regions in the capital to see low gross yields included Mayfair and Chelsea, with yields of 2.02 per cent and 2.09 per cent respectively.

Outside of London, gross yields in Poole, Dorset were just 1.94 per cent, while they were slightly higher in Macclesfield, recorded at 1.95 per cent.

See how Buy to Let yields in different areas changed in December with an article from Simon Whittaker.

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