0:01 AM, 25th September 2023, About 2 months ago 2
With landlords facing lower profits than ever before, according to the National Residential Landlords Association, one lender has worked out where the best areas for buy to let yields are.
Digital mortgage firm Molo has used its internal data and found that the current average rental yield for England and Wales is 4.98%.
The firm has also launched a rental yield calculator, which allows landlords to check the profitability of their current or future property investments quickly and easily, as well as compare different locations.
The results show that the Central Valleys in Wales is the top location for rental yield, with 7.96% – almost double the national average.
The average monthly rent in the area is £697, which is relatively low compared to other areas, but the average property price is also among the lowest in the country, at £100,786.
The chief executive of Molo, Francesca Carlesi, said: “From a rental yield perspective, areas to target at the moment include locations in the north of the country (with low property prices and high rental prices), as well as commuter cities (with a high demand for properties).
“However, it’s important to also consider fast growing cities or university areas which will allow a steady stream of tenants and have strong capital investment growth.”
According to Molo, the next best location for rental yield is Hartlepool and Stockon-on-Tees in the North East of England, with a gross yield of 7.90%.
The average monthly rent in the area is £592, while the average property price is £85,774.
The third best location for rental yield is South Teesside, with a gross yield of 7.66%.
Swansea (gross yield of 7.30%) and Coventry (gross yield of 7.06%) complete the top five ranking locations for rental yield.
The study also reveals that all of the top 10 locations for landlords looking for a high rental yield are either in the North, Midlands or Wales, while all of the bottom 10 locations are in London or the South East.