New analysis from Private Finance claims that Southend-on-Sea is the UK’s number one buy-to-let (BTL) hotspot, offering average rental yields of 6.6% once mortgage costs are taken into account.
The firm says: “With an annual rental income of £23,280, landlords in Southend enjoy a lucrative return for a relatively small upfront investment, with house prices in the area only slightly higher than the national average (£279,358 vs £231,000).
“While a seaside town takes the top spot, UK cities dominate the rest of top 10. Nottingham (6.4%) takes second place, while Edinburgh (4.9%), Greater Manchester (4.8%), Liverpool (4.7%) and the London boroughs of Westminster (5.1%), Tower Hamlets (4.5%) and Camden (4.5%) all enjoy some of the UK’s highest net yields. Home to a significant population of university students and young professionals, these urban areas have strong rental demand helping to bolster rental prices.”
However, to list the London borough of Camden as one of the top 10 locations for BTL due to the “high” rental yield of 4.5%, would be to ignore the fact that property prices fell by £55,000 in the year to July 2018, (Private Finance data), which is considerably more than the average rent paid in the borough each year.