Best buy-to-let areas: the UK’s best buy-to-let areas 2023 (2024)

FAQs

Best buy-to-let areas: the UK’s best buy-to-let areas 2023? ›

The lender has named Manchester with property prices rising and 31% of the population privately renting, London with its high rents and occupancy offsetting slightly lower yields, Bristol with high property price rises, and Cambridge and Peterborough with above-average rents as the best cities for landlords to invest ...

The lender has named Manchester with property prices rising and 31% of the population privately renting, London with its high rents and occupancy offsetting slightly lower yields, Bristol with high property price rises, and Cambridge and Peterborough with above-average rents as the best cities for landlords to invest ...

The buy-to-let product transfer market will be huge in 2023, and many will be faced with no option but to stay with their current lender. Taxes continue to discourage new investors, but let's face it, property is still a reliable investment so many landlords will dig in.

At present, the average rental yield in the North is 7.4% whilst the average yield in the South is 5.2%, meaning that there is a 2.2% gap. For property investors looking to add to their portfolio in 2023, the North East and the Midlands could be areas to focus on for the highest rental yields.

Rental yields can be impacted by a wide variety of different things and as such, no one yield is the same. As a whole, the average UK rental yield sits at 3.63%, so anything over that amount can be considered a high rental yield area.

The average price of homes coming to the market has risen by 1.8%, or £6,647, from April, which is above the average increase for May. At the beginning of the year, research from Finanze suggested residential house prices could fall by 11% in 2023.

Lloyds and Halifax expect house prices to fall 8% in 2023, while Nationwide and online estate agent Zoopla are predicting falls of 5%. But while the consensus is prices will fall this year, “it's a more nuanced picture”, says Myron Jobson, senior personal finance analyst at interactive investor.

Will rents rise or fall in 2023? The rental market doesn't look likely to get cheaper anytime soon, “given higher borrowing costs for landlords and further regulatory changes which will add to the cost of investing”, said Zoopla.

Which city has the highest rental yield in UK? ›

This was done by comparing the average price of a one-bedroom property in all 76 UK cities and the Isle of Man to the average monthly rental income. The results showed that Coventry is the best city to invest in property because it will return your deposit faster than any other UK city.

The UK housing market is facing a number of headwinds in 2023, including rising interest rates, diminishing affordability, and economic uncertainty. As a result, it is likely that house price growth will slow or even decline in the coming year.

Dubai, New York and Los Angeles are the highest yielding cities, above 4.5%, though these have moved on since June 2021. At the other end of the spectrum, Asian Pacific cities dominate. In Sydney, Seoul and Beijing prime yields range from 1.5% to 2.0%.

Grainger, the Newcastle company that is active in Build To Rent and claims to be Britain's biggest landlord, has enjoyed a bumper start to 2023.

A loan to value ratio (LTV) limit of at least 75%, so you'll need a minimum 25% deposit for a buy-to-let mortgage. The amount you can borrow is based on the monthly rental you're getting or are likely to get. Your rental income should cover 125% of your mortgage repayments.

Britain has a severe housing crisis, especially in the most prosperous places in the Greater South East. Across England, the average house costs more than ten times the average salary, vacancy rates are below 1 per cent, and space per person for private renters has dropped substantially in recent decades.

The unprecedented demand and high prices in the UK's city rental market are forcing young renters to delay major personal and professional life decisions, and taking a toll on their well-being, new research on the crisis shows.

Generally, a good ROI for rental property is considered to be around 8 to 12% or higher. However, many investors aim for even higher returns. It's important to remember that ROI isn't the only factor to consider while evaluating the profitability of a rental property investment.

How many properties do you need to make a living UK? ›

Most properties are 100 or 200 pounds profit. Therefore, you're going to need 15 to 20 properties to pretty much replace your income for the average person.

In order for a property to be considered a good investment in the UK, it should have a ROI of at least 5%. This means that for every £1 invested in the property, the investor can expect to make back £1.05.

Analysts at Nomura predict UK house prices will drop 15 per cent by mid-2024, estate agency Savills (SVS) and UK banking group Lloyds (LLOY) forecast prices will slump 10 per cent in 2023, while Knight Frank, another agency, is predicting a 10 per cent fall over 2023 and 2024.

Now, however, most experts agree that increases are on the horizon for buyers in the capital. In the 2022 - 2026 Residential Report, JLL data suggests that in 2023, London is set to see the highest price increases in the country over the year at 5.5%.

If you're considering selling your house or looking to upgrade, now may be the perfect time for a successful transaction. Prices are rising and estate agents Oliver Rayns have estimated that UK estate values will continue to increase until 2023, making now an ideal opportunity to capitalise on it.

Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.

If the current property market trends carry on more or less as they are, the UK could see an average house price of £392,301 by 2050. 'This year, house prices in the UK have increased at an unprecedented rate, increasing by 26 compared to 2015 and 7 per cent compared to 2019,' says Nima Ghasri, Director at Good Move.

The Bank of England predicted that inflation will fall quite quickly this year. The Bank of England's current predictions are that inflation will begin to fall from the middle of this year and be around 5% by the end of the year. It forecasts that inflation will continue falling towards its target of 2% after that.

Latest Rental Index data: May 2023

The average rent in the UK has risen 1.2% since March to £1,213 PCM. Excluding London, the average UK rent price is 9.5% higher than 12 months ago at £1,016 PCM.

Rental demand accelerates from mid 2021

Demand for rented homes remains 10% higher than this time last year. Rents will continue to rise ahead of incomes unless we see a sustained increase in rental supply or a material weakening in demand, both of which appear unlikely at this stage.

What is the rent cap in the UK? ›

Changes to rents

For rent periods that begin in the 12 months from 1 April 2023 to 31 March 2024, this limit is subject to a 7% ceiling. In that year, registered providers may not increase rents by more than 7%. The 7% ceiling does not apply to supported housing accommodation.

The cheapest districts and boroughs to rent in the UK

We can make your search for a cheap rental home even more specific by zooming into local authority areas. Hartlepool is the local authority with the cheapest rent in 2023, sitting just shy of £500 per month.

Wales is the cheapest place in the UK to rent, as the average cost of renting a new let doesn't exceed £800. North of England comes in second, as the average cost of renting a newly let property has recently risen to £800. Rent in Scotland, which was at £750 before, has recently risen to £820.

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

Investors probably need no explanation why and convincing that Florida tops the list of the best states for the long term rental investment strategy. Our nationwide rental market analysis shows that, on average, you can expect the highest rate of return in the Sunshine State.

Is owning a house better than renting in the UK? ›

In summary: buying requires a bigger upfront cost, but renting is more expensive in the long term. A good rule of thumb is that buying a property becomes better value after around 10 years, compared to renting an identical property. Whether it's cheaper to buy or rent depends on several factors.

Connells Group is the largest and most successful estate agency network in the UK with over 80 local estate agency brands and a number of supporting subsidiaries adding to the diversity and strength of our business.

The buy-to-let product transfer market will be huge in 2023, and many will be faced with no option but to stay with their current lender. Taxes continue to discourage new investors, but let's face it, property is still a reliable investment so many landlords will dig in.

Single let residential property has been long considered the best property investment strategy in the UK for two main reasons. Rental Income – Those property investing can earn monthly rent each month, which recently reached an all-time high of £1,199 PCM in the residential UK market.

In most real estate markets, the average good faith deposit is between 1% and 3% of the property's purchase price. It can be as high as 10% for highly competitive homes with multiple interested buyers. Some sellers prefer to set fixed amounts to help filter out buyers that aren't serious.

You'll earn rental income (though possibly less than in previous years). In some areas of the UK, such as Liverpool, Glasgow and Leicester, rental yield is as high as 8%, while other areas are around the 3% mark. At the same time, you could generate capital growth as your money grows as your property value increases.

The minimum deposit is usually 25% of the property's value (although it can vary between 20-40%). Most BTL mortgages are interest-only. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full.

Grainger, the Newcastle company that is active in Build To Rent and claims to be Britain's biggest landlord, has enjoyed a bumper start to 2023.

Is rental property a good investment in 2023? ›

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

Whilst you might get consent to let for a short period on the flat from your residential mortgage lender, it is not possible to live in a property that has a buy to let mortgage on it, so you will need to refinance.

Buy to Let mortgages are for borrowers buying a property specifically to let out, or to remortgage a property they already let out. Let to Buy mortgages are used when you want to buy a new property to live in, but choose to keep your existing property and rent it out.

How long you've been with your lender: Some lenders will only give you consent to let when you've been on your current mortgage deal for a while. Some will want you to have been with them for at least 12 months.

How does buy to let work? When you buy to let you purchase the property and then act as the landlord, letting it out and charging rental payments. In order to make a profit, these payments should be higher than the cost of maintenance, letting agent fees (if applicable) and the monthly mortgage repayments.

The top landowners include Queen Elizabeth, the Crown Estate and Hugh Grosvenor 7th Duke of Westminster.

Most individual landlords (85%) owned between one and four properties, with just under half (45%) owning only one rental property. The remaining 15% of individual landlords owned five or more properties.

After Hong Kong, New Zealand and Australia were the least affordable countries overall in the study which looked at the U.S., Canada, the UK, Hong Kong, Singapore, Australia, New Zealand and Ireland. This chart shows the places where it's hardest to afford a home (2023).

Portugal is the easiest European country to buy property in. Those who wish to purchase property in Europe can purchase commercial property under Portugal's Golden Visa scheme.