The two cities came joint with average rental £0yields of 6.2 percent once mortgage costs are taken into account.
The latest edition of Private Finance’s buy-to-let (BTL) hotspots analysis reveals that while Liverpool has retained its position since May 2017 – despite lower rental yields due to falling rental prices in this area – Nottingham has moved up from second position following a £3121 increase in average monthly rents.
However, while this may be great news for investors it’s not so welcome news to those renting.
Our Director Adam Kingswood commented for the Nottingham Evening Post on this, stating “Because of the shortage of property and more tenants moving to the area – those being drawn to our two excellent universities, hospitals and big employers like Boots, E.ON and Experian £0– rents are being driven up. There are not enough properties compared to tenants
“It is bad news for tenants as the market is very competitive but it is good news for landlords as rents are being pushed up. We need more landlords coming to the market. For investors the positives of investing in property do still outweigh the negatives. Increasing rents, minimal void periods and good yields compare well with other investment strategies, even when factoring in recent tax rises for landlords and the potential upcoming Council selective licensing. “
Across the top 10 hotspots, rental yields have risen by an average of 0.9 percentage points (pp) since May 2017, with Southampton experiencing the biggest increase (2.2 pp). This increase is due to rents rising faster than house prices (20% increase in rents vs. 6% increase in house prices since May 2017 across the top 10 hotspots).