Data analysis on rental return city by city

Data analysis by Address intelligence is showing the average return on investment for renting out a property in the UK is 5%, but this varies drastically when broken down city by city.

Investing in a rental property in Sunderland can earn an investor 7.27% back in rental payments in year one. The average monthly rent is £697, and it would take an investor 14.2 years to pay off their property.

When split by property type, a terraced house in Sunderland makes the greatest return, with a semi-detached and bungalow coming in second and third. Terraced housing in Blackburn, Blackpool and Cleveland also made the list. Interestingly, a detached house in Sunderland was tenth on the list, making Sunderland the best place to buy an investment property across most property types.

The top 10 places to invest in rental property based on rental ROI are:

1. Sunderland
2. Blackburn
3. Durham
4. Blackpool
5. Oldham
6. Cleveland
7. Liverpool
8. Wigan
9. Bolton
10. Manchester

There has been a massive increase in both public and private investment into Sunderland in recent years, and it’s estimated that by 2024, more than £1.5billion will have been invested in a bid to transform the city centre. The evolving city centre has brought with it many new job opportunities making Sunderland a more desirable place to live. Sunderland has a large student population which is attractive to property investors as student housing is particularly profitable as the property can be rented out on a room-by-room basis.

Blackburn has also received a lot of investment, with the newly renovated Cathedral Quarter central to its transformation. The town now boasts a host of new offices and refurbished college and university campuses. In third place is the riverside city of Durham, which has one of the highest rental values offering up an opportunity for property owners to make £873 per month per house.

The bottom 10 places to invest in a rental property in the UK for rental ROI are:

1. West London
2. Llandrindod
3. St Albans
4. Watford
5. Hereford
6. Bromley
7. Cambridge
8. Dorchester
9. Slough
10. North West London

With property prices being extremely high, it comes as no surprise that West London is the least profitable place to buy a rental property in the UK. With the average house valued at £930,790 it would take an investor 27 years of rental income to pay off their property.

Also at the bottom of the list is Llandrindod, a small town in Wales, recently voted in the top 5 happiest places to live in the UK.  Due to this, the property prices are steep, and an investor can expect to only earn a 3.7% return per year based on the average annual rental income of £8,361.

When split by property type, the lowest rate of return across the whole of the UK is for a detached house in St Albans. Investors will only earn a 3.5% return each year, and with the average house valued at £983,979, it’s one of the most expensive places to buy a property the UK.

James Colebeck, Operations Director at Address Intelligence commented: “At Address intelligence we have a unique approach to data. We can help individuals and businesses make decisions based on where they will get the best return.”

The top 100 places to invest in a rental property are:

1. Sunderland
2. Blackburn
3. Durham
4. Blackpool
5. Oldham
6. Cleveland
7. Liverpool
8. Wigan
9. Bolton
10. Manchester
11. Newcastle
12. Doncaster
13. Halifax
14. Cardiff
15. Sheffield
16. Huddersfield
17. Wakefield
18. Bradford
19. Stoke on Trent
20. Telford
21. Warrington
22. Wolverhampton
23. Darlington
24. Hull
25. Chester
26. Swansea
27. Preston
28. Nottingham
29. Coventry
30. Dudley
31. Leeds
32. Walsall
33. Romford
34. Peterborough
35. Birmingham
36. Colchester
37. Newport
38. Medway
39. Brighton
40. Llandudno
41. Southend
42. Crewe
43. Luton
44. Lincoln
45. Northampton
46. Milton Keynes
47. Stockport
48. Derby
49. East London
50. Dartford
51. Southall
52. Portsmouth
53. Bristol
54. Carlisle
55. Lancaster
56. South East London
57. Leicester
58. Ilford
59. Canterbury
60. Plymouth
61. Norwich
62. Oxford
63. Croydon
64. Truro
65. Southampton
66. Bath
67. Enfield
68. Bournemouth
69. Swindon
70. York
71. Sutton
72. West City London
73. Ipswich
74. Gloucester
75. Guilford
76. North London
77. Chelmsford
78. East City London
79. Harrow
80. Twickenham
81. Redhill
82. Tonbridge
83. Worcester
84. Hemel
85. Harrogate
86. Shrewsbury
87. Stevenage
88. Exeter
89. Kingston
90. Taunton
91. Salisbury
92. Reading
93. South West London
94. Torquay
95. North West London
96. Slough
97. Dorchester
98. Cambridge
99. Bromley
100. Hereford
101. Watford
102. Albans
103. Llandrindod
104. West London