A report on the website Property Reporter in April 2017 showed that rental yields on residential properties remain strong, even though rents have fallen in some areas.
The best areas for rental yields are in the North. In Salford, yields of 7% can be achieved, and in nearby Manchester, yields of 5.79% are achievable. A short way over the Pennines, average yields in Leeds are 5.96%.
Amongst the bottom ranking cities are London at just 3.45% yields and Chelmsford at only 2.89%. However, in the boroughs of Westminster and Greenwich, rental yields are stronger though property prices are high. House prices in Westminster have risen by an average of over £27,000 in the last year.
These figures show the importance of investing in the right area in order to maximise yields. House price rises have slowed, and areas such as Barkingham and Dagenham have even seen house prices fall. Landlords need to look at regions where house prices are low and rents are relatively high. Buy-to-let property in these areas can be profitable despite recent tax changes that have increased landlords’ costs.
Currently, rental yields are high, house prices stable and commercial mortgage interest rates are low. These factors make it a good time to invest in buy-to-let property.
The exit from the European Union has made it difficult to predict how the UK economy will be affected, but property experts believe that the property market will remain strong and should not be adversely affected by the Article 50 negotiations.