5th July 2018

Britain’s best and worst yielding buy-to-let cities for SA investors

property in the United Kingdom offers an opportunity to build wealth and benefit from monthly cash returns in sterling.

Propwealth, a UK-based property investment company headed by South Africans, outlines the latest research highlighting the best, and worst, buy-to-let cities to invest in.

Just released information from TotallyMoney suggests university cities and cities undergoing regeneration offer the highest return on buy-to-let investments, with Liverpool coming out on top.

The Free Credit Report and other comparison specialists looked at over 580 000 properties across England, Scotland and Wales to rank each postcode, from best place for buy-to-let yields to worst.

The top buy-to-let cities

Liverpool postcodes L7 and L6 take first and second place, with good rental yields of 9% gross plus. The postcodes are close to two of Liverpool’s three universities, making it a potential hotspot for buy-to-let investors. Throughout Liverpool, renovated one and two bedroom flats in Victorian buildings are popular with invesors, easy to tenant, have minimal monthly costs and generate gross returns of between 8-9%.

London’s best and worst areas

London was one of the worst areas across Britain for buy-to-let yields, with north London faring particularly badly. Of all the London postcodes surveyed, five north London postcodes rank in the bottom 10, with rental yields as low as 1.5%.

However, landlords whose hearts are set on a buy-to-let investment in the capital should look to East and South East London for the best returns. The most noticable is the Royal Arsenal development on the River Thames and is seen as a major hotspot for capital growth as the  Crossrail stations open during 2018 to 2020.

One bed flats with side views of the River Thames are selling from £400 000, and can be mortgaged. Completion date is set for mid 2020. Capital returns over the past three years have been in excess of 10% per annum.

Outside of London, the worst performing area was Bournemouth’s BH14, which has average rental yields of 1.68%. Crewe’s CW12 comes next, with 1.74%.

Furthemore, according to research from proptech firm, Residently, South East London on the whole has the quickest-letting homes with properties averaging just 29 days on the market before letting, whilst West London properties are the slowest to shift.

Opportunities in Liverpool and South East London

”The best investments in Liverpool are in character buildings while the opportunities in London are situated in lifestyle developments, which offer concierge, gyms, shops, pubs and restaurants,” says Craig Illman, a director of Propwealth. “All properties are close to major transport links like trains, busses and ferries.”

Propwealth is launching three buildings in Liverpool starting from £50 000 and Royal Arsenal Woolwich London from £ 400 000

Illman says regardless of current trends, buy-to-let landlords typically invest for steady, long-term gains and therefore should not be affected by the peaks and valleys.

“If anything, the recent research could convince more people of the relative long-term security of bricks and mortar. By remaining as educated and informed as possible and seeking professional advice where appropriate, investors can maximise their chances of retaining a profitable asset that will weather any short-term economic storms that may crop up.”

Propwealth was set up to offer South African investors inroads into high-yielding rental properties based on local knowledge backed by a team of professionals including solicitors, accountants and managing agents, says Illman.

Anthony and Craig from Propwealth will be in South Africa at the end of July 2018 meeting investors regarding these Liverpool and London developments. Contact them via email or visit the website.

Middlesbrough’s TS1 town centre postcode, home to Teeside University, takes third place, with an average rental yield of 9%. The area also has an average asking house price of just over £65 000, making it one of the most affordable buy-to-let hotspots.

Edinburgh postcode EH8 comes fourth, with average yields of  8.5%. It’s home to the University of Edinburgh, which is the sixth best in the UK, according to the Times Higher Education World University Rankings.

With a student population of 100 000, Manchester also performs well. M14 has average rental yields of 10.08% and is home to Manchester Metropolitan University.