The latest buy-to-let index report, compiled by LendInvest, has listed 2017’s top 10 areas in the UK for buy-to-let investors. The areas are ranked according to three factors: rental yields, capital growth and rent increases.
At the top of the list is Luton, the commuter town north west of London, where rental yields are 4.51%. Capital growth for Luton properties is at 10.29% and rents have risen by 6.81%. Luton also tops the list of the most profitable university cities and towns for student accommodation.
Colchester is second with rental yields of 4.22%, capital growth at 13.02% and rent rises of 3.34%.
The top city in the North, and the third best overall, is Manchester. Rental yields on Manchester properties are high at 6.04% and capital growth has risen by 6.26%, but the latter figure is notably lower than in Luton and Colchester.
Places 4 to 9 are as follows:
4. Rochester (yields 4.45%, growth 8.41%, rent rises 5,36%)
5. Hull (yields 4.65%, growth 11.12%, rent rises 2,53%)
6. Stevenage (yields 3.96%, growth 9.54% rent rises 4.74%)
7. Romford (yields 4.78%, growth 11.99%, rent rises 1.01%)
8. Southend on Sea (yields 4.19%, growth 10.5%, rent rises 2.1%)
9. Ipswich (yields 3.98%, growth 10.04%, rent rises 2.33%)
Completing the top 10 is Ilford, where rental yields are 4.19% and rent rises are 1.1%, but capital growth is high at 12.65%.
Landlords investing in any of the top areas should be able to achieve reasonable returns on their investments. Commercial mortgages are available at reasonable interest rates, and buy-to-let investing can be profitable provided landlords choose the right locations.