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Rental yields named top priority for UK property investors.

New research from Simply Business has identified that an average of 70% of property investors consider rental yields to be the most important aspect of their property purchase.

Rental yield is defined as the percentage of the property purchase price which is returned as rental income each year. Amongst the 200 property investors polled in the research, over 70% named rental yields as the most important aspect of their investment.

According to recent figures, the best buy-to-let rental yields in the UK are found in Manchester and Liverpool; with average returns of 6.02% and 5.16% respectively. The poll suggests that, for the majority of property investors, a healthy regular return is more important than a long-term increase in the property’s value.

The second most important consideration for investors was found to be the property’s capital appreciation potential, with 27% of polled investors stating that capital gains are their primary concern for investment. In the UK, London is the location with the highest average capital gains (7.81%) however prices in the capital are already substantially higher than most other regions, effectively pricing many buyers out of the market. For this reason many investors have turned to ‘Northern Powerhouse’ properties, in areas such as Liverpool and Manchester. Prices are currently much cheaper than in the capital however, with long-term plans to make the Northern Powerhouse a rival to London, properties in this region offer tremendous capital appreciation potential.

Assured returns

Select Portfolio recently investigated the growing popularity of hands-off property investments. One of the major benefits of these opportunities is the offering of assured rental returns.

Hands-off investments are able to offer assured returns through a unique lease-back model, in which the developer sells individual properties to investors, then leases back those same properties and lets them to tenants, paying the investor a fixed return based on the development’s operation. This model is currently being implemented in the buy-to-let market, as well as investments in hotels and care home facilities. Property investors who consider rental returns to be their primary concern would be wise to investigate hands-off investment opportunities.

Not only are they free from ongoing costs, these investments also offer returns significantly higher than the 5% average in the UK buy-to-let market. Our Newton Manor healthcare investment opportunity offers investors 8% NET returns for up to 25 years, while our hotel investments at Caer Rhun Hall Hotel and Carmarthen Bay Hotel both offer 10% NET returns for a minimum of 10 years.

These sectors will also appeal to those investors who listed capital appreciation as their top priority. While it is still unclear how the traditional buy-to-let market will be affected by the UK’s recent vote to leave the EU, the hotel sector has seen an increase in both staycations and overseas visitors; while demand for care home services is based upon the UK’s ageing population, which will not change as a result of Brexit. Both of these markets are growing and, as a result, offer impressive capital appreciation potential.

Whether you’re interested in a traditional buy-to-let property, a hotel investment or a healthcare investment, Select Portfolio has the opportunity for you. Our investments offer substantial returns, often assured for multiple years, with other benefits including fixed sell-back opportunities and personal use allowances. Contact a member of our team on +44 (0)1202 765011 or email [email protected] for more information on our available opportunities.


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View our care home investment opportunities.