Buy-to-let investors feeling squeezed by tax changes may want to head to Lancashire and Merseyside to maximise their profits, according to a property website.
Rightmove said the highest potential yields for landlords can currently be found in Bootle, Birkenhead and St Helens in Merseyside as well as Burnley and Accrington in Lancashire, with Swansea and Glasgow also offering particularly attractive yields.
Lower average house prices in many of these areas mean landlords can expect to make particularly decent returns compared with the amount they will need to spend on purchasing a buy-to-let property.
At the start of 2016, the housing market saw a rush of buy-to-let investors snapping up properties ahead of a three percentage point stamp duty increase, which was placed on this sector on April 1 last year. Landlords are also facing tax relief restrictions.
Rightmove's head of lettings, Sam Mitchell, said: "This year will be one of caution for buy-to-let investors due to tighter lending criteria and increased stamp duty. We definitely won't see the spike in quarter one purchases that we saw last year as landlords rushed to buy before last April's new stamp duty deadline."
Looking across Britain, Rightmove worked out the average rent per month on a two bedroom property and the average asking price on its website for such a property to calculate the yield that a landlord could make. The yield is the annual rental income a landlord can expect to achieve as a percentage of the property's value.
Rightmove said buy-to-let investors planning to add more properties to their portfolio in 2017 could consider places in Merseyside and Lancashire where they could get yields of over 7% if they buy the right property. Bootle currently offers landlords a yield of 9.3%, while in Birkenhead landlords could get a yield of 7.5% and in Burnley the yield could be 7.2%, while in Accrington it could potentially be 7.1%.
Here are the rental hotspots with the highest yields, according to Rightmove:
1. Bootle, Merseyside, 9.3%
2. Birkenhead, Merseyside, 7.5%
3. Burnley, Lancashire, 7.2%
4. Accrington, Lancashire, 7.1%
5. Swansea, Wales, 7%
=6. St Helens, Merseyside, 6.9%
=6. Glasgow, Scotland, 6.9%
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