If you’re a Buy-To-Let landlord and are searching for the next city location to invest in, you could do a lot worse than Manchester. Recent research by GoCompare shows the city where you’ll achieve the highest rental yield is the city in the north west of England, as growing demand from a young population has boosted rental levels over the past 12 months.
There are other cities where the rental yield is similar. However, Manchester has a lot more going for it as an option for the property investors among you.
How Manchester compares
Manchester has the highest rental yield of 5.55% among 31 UK cities assessed by the comparison site. The next highest rental yield of 5.37% is achievable in Sunderland, which is eighth in the rankings. Liverpool is next with a rental yield of 5.05% and stands at third in the table. Glasgow, which is 10th in the list, is the only other city with a rental yield of over 5% - it’s calculated at 5.02%.
But, Manchester also offers BTL investors a lot of other benefits. They include:
- An average property price of just £173,381.
- A healthy population of 322,122 aged under 35.
- Just 689 new housing developments.
- An average rental increase of 5.76% in the past year.
All of these details combine to make it GoCompare – and many investors’ – new top region to invest in rental property.
There are, though, other northern cities that are also generating a ‘good’ rental yield, where your entry price is even lower and demand remains solid. They include:
Liverpool – average property price of £130,677, just 258 new housing developments and a rental price increase of 2.65%.
Newcastle-Upon-Tyne – average house price of £161,313, 528 new housing developments and a rental price gain of 4.18%.
Glasgow – average property price of £128,123, 490 new housing developments and a rental price rise of 2.19%.
Value remains in some southern cities
However, you could be forgiven for thinking that you have to head north to make the most of your BTL investment plans. Southern cities still have a lot to offer.
Take London, for instance. While it’s been knocked off top spot by Manchester, it’s still a good city to invest in to gain an average rental yield of 3.05% - that’s 3.05% of a higher average rent than you can achieve in any other city.
You’ve also got a massive population of over 4.4 million under 35’s who are generally still in rental accommodation. However, the average rental levels have fallen by 1.12% in the past 12 months and there are almost 1,000 new housing developments under construction.
Looking south west, Bristol is another good option if you’re looking for a new city to invest in rental homes. It comes with an average house price of £275,193, and average rental yield of 3.92% and rental price growth of 2.43%.
On the south coast, Portsmouth could be a good option too:
- Average property price of 204,870.
- Rental yield of 3.98%.
- No new housing developments.
- Rental price growth of 2.53%.
Chasing rental yields is just one great way of being a successful BTL landlord and property investor. But, it’s not the only way to achieve that.
Whatever region you’re based in, keep an eye on surveys like this but also, on the actual prices of properties, the speed at which homes are rented out and what rental levels are like in an area close to where you currently do business.
That way you’re well-placed to find the right investment for you; one in an area your familiar with and can more easily manage, than a property hundreds of miles away.