Buy-to-let is no easy street, however using the Telegraph’s buy-to-let hotspot report could at least help. It could be useful in helping you to make an educated decision on where to invest in a buy-to-let property for the best return on your money, or yield as they say in the industry.
Property prices have been on the rise, and although the rental market is still a lucrative prospect, yields are falling. That is the ratio between the value of the property and the rental income. That said it is suggested that rental prices will be muted for 2015 due to speculation that interest rates will rise and lows in disposable income to continue, keeping property rental an attractive option for tenants.
Where is best to invest?
One way to stay on the right side of easy street is to choose where you invest in your buy-to-let property. The number of letting tenants are still rising in the UK, preferring to rent their homes because of increasing house prices and stagnant wages.
Many areas are following in the footsteps of London and are rapidly heading towards a third of the properties being rented, both privately and by letting agents. With the right homework and a keen focus on locations where rents have increased faster than house prices, your investment could be a solid one.
Current areas of the UK that are worthy of buy-to-let investment attention according to HSBC’s hotspot list are:
Demand for rental properties in Manchester remains high, thanks to one of the largest student populations in Europe. House prices in this area are cheaper than in other regions too.
Low average property prices and a strong rental demand make Blackpool a good prospect. Hull and Blackpool are amongst the areas that would require the lowest level of initial investment outlay.
A surge in the demand for rental properties in Forest Heath, Suffolk has resulted in the fastest annual growth in rental yield compared to any other region in the UK. Investment in a buy-to-let property in this area will required a considerable outlay with the average house price being £171,322.
Other areas included in the top ten were Coventry, Southampton, Nottingham, Liverpool, Cardiff and Portsmouth.
Is Southampton Sound?
Brian Linehan of Belvoir Lettings, Southampton is happy that Southampton is showing up in the top ten, and shares that “Here in Southampton we achieve sub 6% on prime flats and houses, between 6% and 7% on good secondary and over 8% on student and ex-council stock. Clearly your level of capital growth will vary with each asset class, so it is not all about yield!”. Read more of Brian’s comments here.
So, although buying-to-let is no easy street it can be a relatively safe bet provided you do your homework and research the more lucrative areas in which to invest. These top tips for buying-to-let could be helpful too.
Are you looking to invest in a buy-to-let property? Had you considered a property in any of the top ten areas? Let us know in the comments.