A property investment platform analyzed rental yields to identify the most profitable regions for buy-to-let investors. Sourced Franchise examined UK house prices, rent values, and yields in June 2022 and June 2023 to assess the impact of the challenging economic conditions on buy-to-let returns. The data reveals that the current average yield in the UK is 5.2%, representing a 0.4% increase compared to the previous year.
Currently, the most attractive investment opportunities with strong yields are found in Scotland (5.9%), Northern Ireland (5.7%), the North West (5.5%), Yorkshire & Humber (4.9%), and London (4.7%).
Scotland stands out for its remarkable annual yield increase of 0.64%, while London also performs well with a growth of 0.49%. Other regions showing positive growth include Wales (0.35%), the West Midlands (0.34%), North West (0.34%), and Yorkshire & Humber (0.34%).
The South East, on the other hand, recorded negative figures, with a current yield of 4.0%, representing an annual decrease of 0.02%.
Chris Kirkwood, director of Sourced Franchise, highlights the potential opportunities for investors amid economic challenges in the UK. Despite a struggling economy and mounting concerns about rising mortgage rates, he suggests that the current environment presents calculated risks worth considering. With house prices expected to decline further before rebounding and rent values increasing rapidly, buy-to-let landlords able to secure current mortgage deals are advised to seize opportune properties in favorable locations.
According to Chris Kirkwood, despite the challenging phase in the UK’s economy and concerns about rising mortgage rates affecting the housing market, savvy investors can discover opportunities in the current situation. He suggests that house prices may continue to decline for some time before eventually rebounding, making it a favorable time for potential investors to enter the market.
On the other hand, rental values are rapidly increasing, making buy-to-let investments potentially profitable. Kirkwood advises buy-to-let landlords with the capability to secure advantageous mortgage deals to act promptly when suitable properties become available in promising locations.
Data from Sourced Franchise indicates that specific regions present highly favorable conditions for buy-to-let investments, with Scotland, Northern Ireland, and the North West leading in terms of rental yields. These regions boast appealing annual yield growth rates, enhancing their attractiveness as investment options.
Investors seeking stable income streams and long-term profitability may find these regions particularly alluring. Nevertheless, Kirkwood advises investors to conduct extensive research and seek professional guidance before making investment decisions, as market conditions can be unpredictable and can vary across different locations.
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