Posts with tag: highest rental yields

Investors Receiving Highest Returns in Manchester

Published On: June 1, 2015 at 5:08 pm


Categories: Landlord News

Tags: ,,,

HSBC Mortgages has found that the top three areas for receiving the highest rental returns are in the North West. So far this year, Manchester has offered the largest yield, at 7.93%.

Investors Receiving Highest Returns in Manchester

Investors Receiving Highest Returns in Manchester

Manchester made it to the top of the buy-to-let hotspots in the country, up from second place in 2014. Rental returns in London are some of the lowest.

Buy-to-let investors have been heading to the North of England as prices are typically lower and consequently produce higher yields. HSBC found Manchester, Kingston upon Hull and Blackpool to have the best returns.

The bank also revealed that Manchester has experienced a slight rise in average property prices, up from £104,244 in 2014 to £108,870 in 2015. However, economic progress in the city has upheld strong demand for rental accommodation.

Annual rents in Manchester have increased by 4% in the past year, from £8,316 to £8,628. Furthermore, the North West as a whole, especially Manchester, has one of the largest student populations in Europe.

HSBC found that over a quarter (27%) of housing stock is privately rented in the city, giving it the highest proportion of rental homes in the UK.

Kingston upon Hull and Blackpool have climbed the list due to their low house prices and strengthening demand for rental accommodation.

The average house price in Kingston upon Hull is £69,135 and Blackpool’s is slightly higher at £79,654. However, both areas require the lowest initial buy-to-let investment of all locations studied. The research included 50 UK towns and cities with the most private rental housing stock.

Top 20 areas for buy-to-let returns

Position Location 2014 position % of privately rented housing Average house price Average monthly rent Average annual rent Rental yield

Year-on-year yield growth

1 Manchester 2 27% £108,870 £719 £8,628 7.93% -0.7%
2 Kingston upon Hull 5 19% £69,135 £450 £5,400 7.81% 4.5%
3 Blackpool 4 24% £79,654 £488 £5,856 7.35% -3.6%
4 Forest Heath 22 22% £171,322 £1,035 £12,432 7.26% 38.7%
5 Coventry 6 19% £115,945 £702 £8,424 7.2% 1.5%
6 Southampton 1 23% £151,415 £900 £10,900 7.13% -18.3%
7 Nottingham 3 22% £89,312 £524 £6,288 7.04% -8.3%
8 Liverpool 9 22% £90,426 £494 £5,928 6.56% 0.8%
9 Cardiff 16 20% £150,892 £802 £9,624 6.38% 6.8%
10 Portsmouth 8 22% £155,696 £825 £9,900 6.36% -2.2%
11 Slough 11 23% £198,972 £1,050 £12,600 6.33% -1.8%
12 Cambridge 10 24% £205,019 £1,083 £12,995 6.31% -2.5%
13 Bournemouth 12 28% £183,600 £950 £11,400 6.21% -0.3%
14 Oxford 7 25% £277,201 £1,432 £17,184 6.2% -11.7%
15 Luton 15 21% £144,721 £725 £8,700 6.01% 0.4%
16 Leicester 17 21% £115,860 £550 £6,600 5.7% -3%
17 Brighton & Hove 13 28% £265,858 £1,248 £14,976 5.63% -8.8%
18 Southend-on-Sea 23 21% £172,024 £776 £9,312 5.41% 4.4%
19 Norwich 25 20% £158,102 £700 £8,400 5.31% 5.4%
20 Newham 14 33% £292,306 £1,255 £15,192 5.2% -13.4%

Head of Mortgages at HSBC, Tracie Pearce, comments on the significance of location, property prices and rental demand when investing in the buy-to-let sector: “Our research shows buy-to-let remains an attractive option for investors, but it’s important they focus on locations where rents have outpaced house prices. This means not just looking at large towns and cities, but also commuter areas and those with high rental demand and concentrated employment, such as a hospital or university nearby.

“Almost a third of areas in our report have seen a year-on-year growth in yield and almost half of the areas have achieved yields above 5%.

“Buy-to-let is a big investment and shouldn’t be taken lightly, but with the right research, landlords can feel confident that they can achieve good returns around the UK.”1

The top buy-to-let hotspot in London is Newham, with an annual rental yield of 5.2%.

However, the capital has experienced continuous decline in rental returns as property prices have increased without corresponding rents. Newham, Brent and Lewisham have seen a decrease in yield growth of over 10%.

Six of the ten worst places for buy-to-let returns are in London, with yields as low as 2.87% in Kensington and Chelsea, where the average house price is now over £1m and rents have been stagnant.


Seaside Towns Offer Highest Yields for Landlords

Published On: May 7, 2013 at 3:42 pm


Categories: Finance News

Tags: ,

Landlords who own properties in coastal towns and cities achieve the best rental yields, according to a new report.

Research from HSBC Bank suggests that buy-to-let properties in Southampton, Kingston-Upon-Hull, and Blackpool are proving lucrative, with returns of almost 8%. Non-coastal cities, such as Manchester and Nottingham are not far behind.

Seaside Towns Offer Highest Yields for Landlords

Seaside Towns Offer Highest Yields for Landlords


Head of Mortgages at HSBC, Peter Dockar, said that irrespective of location, “buy-to-let remains a good investment for those looking for above-average returns.”[1] Mr Dockar continued: “23 of the top 50 areas offer yields above 5%,” buy-to-let returns can be “significantly more than is available from more traditional saving options.”[1]

Desirable Area

Despite advocating buy-to-let in general, Dockar believes that the findings suggest “it is clear there is a fine line between a property in a desirable area, the rents that can be achieved and the returns that can be yielded.”[1] Taking London as an example, it appears that Dockar is speaking sense, with the capital not even in the top ten best places for rental yields.


High property prices have led HSBC to describe London’s rental yields as “relatively modest.” The best returns came in the borough of Southwark, where the average property price is £401,405. Average rents in the borough are £2,058, leading to a yield of around 6%. This already good rental return looks even better in comparison to areas such as Kensington, where property prices in excess of £1m lead to rental yields of just 3%, the lowest in the capital.[1]

With landlords searching for maximum returns on their investment, tenants are having to pay record high rental costs. Increased demand for rental properties have seen rents soar to an average £1,106 per month in London, according to figure from LSL Property Services. Properties are on average £81 more expensive than they were 12 months ago. [2]

David Newnes, director of LSL, said: “Rents in London are red-hot.”

He continued: “In spite of the unseasonal weather the rental market has gained some ground.’ Newnes then said: “Over the next few months, it looks likely the spring bounce will continue.”[2]