Buy-to-let landlords are being told to ditch the spreadsheets and get their boots on the ground because property prices are soaring in areas with high rental demand.
The latest market analysis from property experts Benham and Reeves shows that investors can make a killing by focusing on hot spots where tenants are desperate for a place to live.
Big Premiums in High-Demand Areas
The research reveals that homes in high rental demand areas across England sell for an average of £372,055, a whopping 23% (£69,662) higher than the national average.
This premium is even more impressive in certain regions:
- North West: Properties in high-demand areas are 33% (£72,338) more expensive than the regional average.
- North East: A 30% premium.
- Yorkshire & Humber: A 29% premium.
- South East: A 28% premium.
- West Midlands: A 25% premium.
Even in the East of England, where the premium is at its lowest, houses still sell for 15% more than the regional average.
Higher Yields Too!
It’s not just about the price tag. Benham and Reeves also found that landlords who invest in high-demand areas earn an average yield of 5.49%, compared to 5.15% in areas with lower rental demand.
Where to Find these Hotspots
The research shows that 24,857 properties in high rental demand areas are currently on the market across England. Here’s a breakdown of the regions with the most properties available:
- South East: 21%
- East of England: 18%
- South West: 17%
- North West: 12%
- East Midlands: 12%
- West Midlands: 10%
- Yorkshire & Humber: 7%
- London: 2%
- North East: 1%
The Expert View
Marc von Grundherr, Director of Benham and Reeves, explains: “It’s been a tough time for buy-to-let landlords, with new rules and regulations making it harder to make a profit. But, buy-to-let is still a strong investment with long-term stability.
“The key is to invest in the right place. By focusing on high-demand areas, you can maximize your returns and protect the value of your investment over the long term.”
So, if you’re looking for a smart and reliable investment, don’t ignore the high rental demand areas. They’re the key to unlocking lucrative returns in today’s competitive property market.