With rents in the UK rising and an increasing number of investors hoping to capitalise on the Buy to Let (BTL) market, where are some of the best locations for landlords to achieve a good return on their investment? The two north-west hubs of Manchester and Liverpool are emerging as strong contenders, with properties in the region seeing rents climb by 4.1 per cent between October 2010 and the same month in 2011, LSL Property Services recently revealed.
Yields in the area are also up on a year earlier, increasing from 6.4 per cent to 6.8 per cent by this October, the firm noted. David Lawrenson, private rental expert and owner of LettingFocus, explained that developments such as MediaCityUK in Salford are helping to improve prospects in Greater Manchester. "I think it's a fantastic complement to the economy, it's sufficiently large enough in terms of the number of people employed to really have a boost to that area," he stated, adding that he expects the development to have a "very positive impact" on the region.
Earlier this month, Property Frontiers highlighted the opportunities available for BTL investors in Liverpool. The organisation noted that in the city, demand is much greater than supply, which is helping fuel the rental market. Meanwhile, tight lending criteria has resulted in rates of homeownership in the area falling, which presents a further chance for landlords to capitalise on the need for new properties in Liverpool. Director of the firm Ray Withers stressed that it is not only domestic buyers who are showing an interest in the UK's BTL sector. "Big rental returns from UK property have alerted overseas investors to the UK, attracted not only to a solid market from which to reap weighty returns, but also a safe and reliable place to invest," he commented.
The Savills Autumn Residential Investment Research Bulletin drew attention to the high returns predicted for those entering the BTL market. Over the next five years, the firm anticipated that average rental growth in the UK will reach 20.5 per cent. In addition, rental yields from Grade C residential stock in the north of England are expected to hit nine per cent by 2016, making such properties a target for investors looking for a longer-term investment.
- Wednesday 30 November 2011