The best buy-to-let hotspots for 2015, revealed.
New research conducted by HSBC on rental returns has just been released, highlighting the best UK towns and cities for buy-to-let investments.
The report examined the latest data on rental returns, property prices and demand to come to their conclusions.
Manchester was placed in the top spot, as demand for rental accommodation is strong – largely due to the size of the student population in the city, one of the largest in Europe. Kingston upon Hull and Blackpool gain second and third place respectively, due to their moderate property prices and rental demand. Average returns are circa 8pc before tax in these areas, compared to London which offers meagre returns of around 3pc in some areas.
In Manchester, average house prices have increased by 4pc from £104,244 in 2014 to £108,870 now, while average annual rents have kept pace, up from £8,316 to £8,628. The average rental yield here is 7.98pc.
While demand for rental properties is greatest in London, so are the property prices – with the average price fast approaching £500,000. The capital’s top BTL hotspot offers rental yields of just 5.2%, and average yields in the area fell by more than 13% over the last year.
The buy-to-let industry is booming in the UK and the market is now worth £1trillion. Professional and individual investors are seeking to put more cash into the industry, yet it’s difficult to know where’s best to invest.
Rising property prices are making it difficult for investors, in some cases causing yields to be unattractive. Those requiring a mortgage to secure the property could open themselves to additional risks.
The key to success is capital growth. If the property you invest in appreciates in value, you will increase your total profits. Whilst it’s difficult to predict future house price growth, examining the cost of the property against the average annual rent is a good indicator of where to buy.
Select Portfolio specialise in selling profitable property investments in areas of the country benefitting from high rental yields and attractive purchase prices with capital appreciation prospects.