Research conducted by Lomond, an estate and letting agency group in the UK, shows Britain’s average rental yield stands at 4.5%, marking a rise from 4% just a year ago.
Leading the charge with an average rental yield of 5.4%, Scotland emerges as the king at a regional level. Not far behind, the North East and North West boast yields of 4.8% and 4.6%, respectively, making them top contenders for investors. On the flip side, the South East lags at the rear with a more modest yield of 3.8%. However, when we zoom in on specific postcodes, the potential for lucrative yields becomes even more pronounced.
Top Performers
Topping the charts, Leeds’ LS3 postcode emerges as the superstar of the British rental market, offering an astounding average yield of 12.8%. This Yorkshire powerhouse isn’t alone; Bradford’s BD1 isn’t far behind, with yields of 11.8%, while Leeds makes another appearance with LS4 at 9.7%.
Manchester’s M14 postcode, Nottingham’s NG1, and NG7 postcodes, along with other notable mentions like Sunderland’s SR1, and postcodes in Scotland and Coventry, round out the top 10, each offering yields ranging from 9% to 11.6%. These areas represent the crème de la crème for buy-to-let investors, promising robust returns on investment.
Yield Climbers
It’s not just about the current yield; it’s also about growth. Leeds’ LS3 postcode doesn’t just sit at the top for its yield; it’s also the fastest climber, boasting a 5.6% increase in the last year alone. Glasgow’s G4 and Nottingham’s NG1 follow suit, with significant annual increases in their rental yields, highlighting them as areas of rapid growth and potential for investors.
Investment Outlook
Martin Elliot, CEO of Lomond’s Yorkshire brands, said “Despite the government’s best efforts, buy-to-let investment remains a lucrative endeavour and we’ve seen the average yield on offer increase across all regions of Britain over the last year, with the exception of Scotland where it has remained static. So while the government may have attempted to lure more landlords away from the rental sector with a cut in capital gains tax, it remains a very good time to invest in rental market bricks and mortar.”