Despite tax worries and Brexit gloom, the letting market continues to grow, with new figures from Agency Express showing the number of new listings to let across the UK rose by 1.3 per cent during September, compared to the same time last year, while the volume of properties let was up by 4.4 per cent. However, figures over a three-month rolling period show the number of properties let actually fell by one per cent.
Different regions are showing big variations in success, with the North East having an increase of 19.6 per cent of properties to let, followed by Yorkshire & Humberside at 12.6 per cent, and East Midlands at 12.3 per cent. The West Midlands led the table in properties let with an increase of 17.7 per cent, followed by Wales with an increase of 13.8 per cent, and Central England at 11.4 per cent. The biggest declines for September were in East Anglia, with new listings down 11.2 per cent and properties let at -1.4 per cent. Scotland’s new listings were down 4.2 per cent.
Agency Express managing director, Stephen Watson, said year-on-year figures are still recovering from the fallout in the buy-to-let market. That said, the rental sector continues to be an attractive investment, particularly for people who are unimpressed by low interest rates or put off by the volatile stock market or currency market. Putting your money into bricks and mortar is still seen as a sound investment, with many people seeing property as a way of making money.
However, knowing which region to invest in is another matter entirely. The TotallyMoney Buy-To-Let Yield Map pinpoints the hotspots, which is useful information for any landlords or investors. The research looked at 137,955 rental properties and 303,822 properties for sale on October 1, 2016. Interestingly, it shows a clear North/South divide, with northern counties faring better with nine of the 10 highest-yielding postcode areas being in Scotland, the North and the Midlands. Eight of the 10 lowest-yielding postcodes are in Greater London, the South East and the South Coast. This is particularly interesting for investors, as these are areas of high demand, due to being commutable to London. The advantage in buy-to-lets is that the demand is certainly there, particularly for homes near to train stations or tube lines, but they will not make as much money as those in the North. Additional research will also need to factor in where there is a demand for rental properties in the postcode areas offering the highest yields.
According to the research, the LS6 postcode in Leeds offers the highest yield of 10.79 per cent, as the average rent is £1,044 while the average house price is £116,115. The BD1 Bradford district is second at 10.33 per cent, YO1 in York is third at 9.73 per cent and PR1 in Preston is fourth at 9.08 per cent. Interestingly, the worst postcode area to invest in is in BH13 in Poole, with a dismal 1.13 per cent yield, which is largely down to high property prices. N6 in London is next, with a 1.38 per cent yield followed by BH14 in Poole, at 1.54 per cent, and N2 in London at 1.65 per cent.