Data analysis on rental return city by city

Data analysis on rental return city by city

7:45 AM, 6th May 2021, About 3 years ago 1

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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

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12:26 PM, 7th May 2021, About 3 years ago

Useful only if you are thinking of investing in BTL today, but of course, takes no account of costs and feckless tenants. West London is rock bottom, but I bought in Chiswick in 2003 and 2005, rental yield was 8%, costs were low, voids were non-existent, and I sold out in 2016 and 2019 with 100% and 120% capital appreciation. I bought in Wakefield and Sheffield in 2008 and they are both well up the list. My yield has been no more than 5%, costs are high, voids are high, I've now lost all my profit trying to evict a miscreant tenant who hasn't paid a penny for 13 months, and capital appreciation... zero! I can't wait to exit the PRS!

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