The North West (& Liverpool in particular) offer highest yields for buy-to-let investors


Advantage has its headquarters in Warrington, and we frequently work with leading build to rent (BTR) developers in the North West, providing structural warranties for their projects. So we were interested (although not entirely surprised) to read a feature by BuyAssociation this week focusing on the higher than average rental yields in the region.

buy-to-letBuyAssociation stated: Online mortgage broker Mojo Mortgages has revealed how postcodes across the UK are currently performing in terms of buy-to-let yields for landlords. The company conducted its research between 18th and 25th May, so it reflects the up-to-date situation taking coronavirus into account.

The findings, which used UK Land Registry, Zoopla, On The Market and Property Data figures, identified Liverpool as the UK’s top performer. Postcodes in the city appear several times in the top 20 list, making it the highest-yielding location overall. It is also one of the most desirable UK hotspots for investors to consider right now.

The L7 postcode tops the list, where landlords make average yields of 10.3%. The average price of a property in this area is well below the UK average at £95,000. Also scoring highly were L6 with 8.4% yields, L1 with 8.1%, and L15 and L4 both with 7.4%.

Mortgage Introducer also took a look at Mojo Mortgages’ findings, reporting that the North West is one of the top regions for strong buy-to-let yields.

As well as a number of profitable areas in Liverpool, the area of M14 in Manchester which covers Fallowfield has a yield of 7.60%.

buy-to-letProperties in the City of London and its surrounding boroughs generate the lowest yields in the UK, while average prices to buy are above the £1,000,000 mark.

The South East also features in the list of the worst BTL postcodes. This is likely to be due to areas such as Wokingham, Chiltern and Horsham being commuter hotspots, rather than areas to rent in.

Stratford-upon-Avon is the only location from the West Midlands to feature in the bottom 10, with an average yield of 2% and asking average prices at just over half a million.

IG11 in the London borough of Barking offers the best rental yield in the capita, and average asking prices of £289,374. Dagenham features three times in top 10 BTL postcodes within London, with areas such as Becontree and Becontree Heath also generating yields of more than 5%.

Ealing only featured once in the London top 10 with Northolt generating an average yield of 5%.

The postcode of W1 in Central London generates the worst yield in the city, at 1.4%, with the average asking price of a property around £2.3m, while average asking rent is at £2,807 per month.

The average salary in London equates to £37k annually, and £2,300 monthly, making it unaffordable for many sole renters.

The best of the worst in London is in Hampstead Heath N6, where the average asking price is lower than in other areas of the worst 10, at £865,000, and average asking rent is £1,614, making the buy-to-let yield 2.2%.

Related read: Renting for life? Advantage’s recent blog on how renting became the new buying in the UK.

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Advantage Home Construction Insurance (AHCI) provides structural defects insurance – operating nationally with offices in Warrington, London and Birmingham – offering development-related insurances and a service designed to give customers peace of mind.

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