Data analysis by Savills shows low entry costs have put Northern cities on UK’s list of top ten buy to let hotspots
Newcastle, Peterborough and York could all offer good levels of returns for buy to let investors as regions outside London and the South East expect faster rates of growth in coming months.
The highest return on capital growth over the last 12 months was noted in York while Guildford, Woking, Cambridge and St Albans also noted strong performance.
Other locations reporting decent returns and featuring on the top ten list of UK buy to let hotspots include Bath and North East Somerset, Norwich, Cardiff and Solihull.
The only London region to make the list was Kensington and Chelsea, coming eighth.
Location, location, location
As location can be a major influence on investment returns when dealing with property, Savills’ analysis holds great importance for buy to let landlords.
Those who enjoy higher yields have more money to live on themselves and potentially more cash to invest in further properties.
In this regard, some northern regions performed strongly once again. Although London’s Greenwich topped the list for high yields, Peterborough, Newcastle, Leeds and Salford weren’t far behind.
An added bonus with properties in these areas is that entry costs are considerably lower than in the capital; giving property investors the potential to achieve greater profits.
“The residential investment focus is likely to shift to the regional cities where, in comparison to London, the cost of entry is lower while both income yields and capacity for medium term price growth are higher,” explained Lucian Cook, Head of Residential Research at Savills UK.
He went on to say that while the North is an ideal area of investment for those where income yield is the priority they do need to proceed with caution.
“Investors in these markets will need a longer investment horizon to benefit from late cycle house price growth,” he concluded.
Investors with shorter-term outlooks should therefore focus on southern regions where regeneration or restructure gains are likely.
This could include areas such as Reading, Plymouth and Medway which completed the list of top ten locations for buy to let income yields alongside Birmingham and Luton.
15th May 2015