Scotland is home to the highest rental yields

by Property 118

13:42 PM, 5th December 2019
About 2 months ago

Scotland is home to the highest rental yields

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Scotland is home to the highest rental yields

Lettings management platform, Howsy, has revealed the most appealing markets for UK landlords based on the annual rental return available as a percentage of the property investment cost.

Across the UK the current annual rent of £11,436 accounts for 4.9% of the average UK house price (£234,370). But where in the UK sits way above this national average?

Scotland seems to be the place to invest for landlords, with 18 out of the top 20 areas with the highest annual rent as a proportion of house price located north of the border.

Glasgow tops the table with the annual rent of £10,596 accounting for a huge 7.7% of the average house price, closely followed by Inverclyde (7.1%), Midlothian (6.9%) and West Dunbartonshire (6.9%).

Burnley is the highest outside of Scotland and across England at 6.5%, with Belfast ranking 10th (6.2%), while County Durham and Blackpool place 17th and 18th (5.7%).

Founder and CEO of Howsy, Calum Brannan, commented:   “There are a whole host of costs to account for when investing in a buy-to-let property but the most important is, of course, the rental income available.

“However, high rental income doesn’t necessarily mean an area offers the best investment option and if it requires a high initial cost to buy the property, you could be recouping that investment for longer than you might in other areas with a lower rental income.

It’s about finding that balance and areas such as Glasgow not only offer a relatively affordable property cost to begin with, but the rental income available as a proportion of house price is far higher than anywhere else in the UK.”

Ranking: Highest rent as a percentage of house price in the UK
Location Average House Price Average Rent (annual) Rent as % of Average House Price
Glasgow £137,952 £10,596 7.7%
Inverclyde £105,984 £7,476 7.1%
Midlothian £187,531 £13,008 6.9%
West Dunbartonshire £109,087 £7,559 6.9%
Burnley £84,598 £5,496 6.5%
East Ayrshire £101,042 £6,336 6.3%
Falkirk £129,803 £8,124 6.3%
Dundee £127,379 £7,920 6.2%
Clackmannanshire £130,940 £8,124 6.2%
Belfast £133,620 £8,280 6.2%
Moray £145,701 £8,820 6.1%
Aberdeen £148,021 £8,820 6.0%
Renfrewshire £126,620 £7,476 5.9%
North Ayrshire £108,525 £6,336 5.8%
South Lanarkshire £129,643 £7,536 5.8%
North Lanarkshire £109,094 £6,339 5.8%
County Durham £103,320 £5,916 5.7%
Blackpool £109,558 £6,252 5.7%
Na h-Eileanan Siar £130,726 £7,416 5.7%
Hyndburn £100,019 £5,652 5.7%
       
United Kingdom £234,370 £11,436 4.9%

Rental and house price data sourced from the Land Registry, Gov.uk, Gov.scot, Gov.wales and Ulster University.



Comments

Rob Crawford

14:13 PM, 5th December 2019
About 2 months ago

I would like to see the "Average House Price" figure replaced with a "Cost to Market" figure that includes renovation, tax & legal costs. I accept it's not possible to draw this data down from estate agent stats but if you are investing, this figure can be estimated by the buyer to give a more realistic investment return calculation. This could change the figures above if for instance more renovation is required in northern properties when compared to those in the south!

Michael Barnes

0:22 AM, 7th December 2019
About 2 months ago

Reply to the comment left by Rob Crawford at 05/12/2019 - 14:13
Also needs to consider on-going costs such as licence fees and insurance.

Puzzler

7:49 AM, 7th December 2019
About 2 months ago

Just shows how misleading statistics can be. The reason Aberdeen scores highly is that the property market has collapsed with the oil price and redundancies in the thousands. The population has dropped by thousands in the last few years. Many properties for sale and for let have been on the market for years.


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