Where in Britain can landlords maximise their returns?

Landlords looking to boost their returns should consider snapping up properties in Rochdale, Blackpool or Glasgow, research suggests.

Zoopla analysed urban areas across Britain, excluding London, to find out where investors could expect to get higher returns – weighing up how expensive a property may be to buy against the potential rent landlords could expect to generate.

Average asking prices on two-bedroom homes and average rents on such properties were analysed.

Rochdale came out on top, with a typical gross yield of 9%, followed by Blackpool – where landlords could potentially make an 8.6% return on their investment.

Blackpool seafront
Blackpool is among the places where landlords may enjoy higher yields, Zoopla said (Peter Byrne/PA)

Glasgow was in third place, with a 7.96% yield projected.

Northern England and Scotland dominated the top 10 list, with Wigan, Middlesbrough, Dundee and Durham also included.

The percentage yield was calculated by dividing the average yearly rent by the typical price of the property and multiplying this by 100.

Zoopla also looked at where landlords could expect to get lower percentage returns – and found many places in London’s commuter belt topped the list.

St Albans was identified as the worst performer, with a projected return of 3.65%.

With an average price tag sitting just below £100,000, landlords could buy around four two-bedroom homes in Rochdale for the price of just one in St Albans.

Croydon, High Wycombe and Watford, which along with St Albans are also popular with London commuters, were also on the list of places with the lowest percentage yields, as was Bath in the South West.

Stamp duty and other tax changes in recent years have been blamed for eating into landlords’ profits.

Bath view
Bath is on Zoopla’s list of places with the lowest estimated rental yields (PA)

Annabel Dixon, of Zoopla, said: “This research shows landlords and potential landlords where there are still opportunities in the buy-to-let market.

“Despite the challenges facing the sector, yields – particularly in north England and Scotland – match up well against other forms of investment.

“It’s no surprise that towns further south provide lower yields. House price growth has slowed, but property is still considerably more expensive in these locations, meaning that even with higher rents, the returns are more limited for landlords.

“However, there are still pockets of opportunity for those who thoroughly research their local housing market.”

Here are the top buy-to-let towns and cities across Britain by gross yield according to Zoopla, excluding London and based on a two-bedroom property. Figures show average asking price of a home followed by average monthly rent and gross yield:

1. Rochdale, £98,360, £738, 9.00%
2. Blackpool, £94,509, £678, 8.60%
3. Glasgow, £116,902, £775, 7.96%
4. Wigan, £101,689, £601, 7.09%
5. Middlesbrough, £84,728, £489, 6.92%
6. Sunderland, £91,145, £508, 6.69%
7. Dundee, £109,750, £611, 6.68%
8. Durham, £98,436, £533, 6.50%
9. St Helens, £85,909, £463, 6.46%
10. Bradford, £87,987, £469, 6.40%

Here are the bottom buy-to-let towns and cities across Britain by gross yield according to Zoopla, excluding London and based on a two-bedroom property. Figures show average asking price of a home followed by average monthly rent and gross yield:

1. St Albans, £397,424, £1,209, 3.65%
2. Croydon, £410,391, £1,309, 3.83%
3. Hereford, £194,052, £635, 3.93%
4. Worthing, £277,169, £923, 4.00%
5. High Wycombe, £308,347, £1,034, 4.02%
6. Poole, £271,994, £915, 4.04%
7. Bath, £330,279, £1,118, 4.06%
8. Aylesbury, £258,200, £882, 4.10%
9. Watford, £342,902, £1,178, 4.12%
10. Solihull, £243,441, £840, 4.14%

Here are the average buy-to-let yields by nation and region, ranked from highest to lowest, according to Zoopla, based on a two-bedroom property. Figures show average asking price of a home followed by average monthly rent and gross yield:

1. Scotland, £126,084, £632, 6.02%
2. Yorkshire and the Humber, £120,745, £548, 5.44%
3. North West England, £135,031, £605, 5.37%
4. North East England, £127,423, £539, 5.08%
5. West Midlands, £163,086, £652, 4.80%
6. East Midlands, £151,005, £604, 4.80%
7. Wales, £138,295, £531, 4.61%
8. South East England, £278,824, £995, 4.28%
9. East of England, £256,964, £897, 4.19%
10. London, £639,050, £2,220, 4.17%
11. South West England, £209,519, £727, 4.16%

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