New research by BM Solutions, the buy-to-let brand of Lloyds Banking Group, has revealed that it is landlords in the North of England that are making the best annual rental returns.
Landlords in Northern England achieved annual yields of 7% in the second half of 2016, with rents averaging out at £513 per month.
Other regions that have performed well include Northern Ireland, with rental yields of 6.5% and the North West of England at 6.4%. Greater London, by comparison, only achieved average yields of 4.4%.
Phil Rickard, Head of BM Solutions, stated, “ In the second half of 2016 the market slowed with buy-to-let transactions falling by 41% compared to the same period a year earlier, as tax changes and stamp duty rules have inevitably left an imprint on the market. However, demand for rental properties remains high and returns have remained strong in the past 6 months despite the challenges that have faced the market during that time.”
Phil continued, “Rental yields remain strong, still offering investors high real returns. Typically, buy-to-let investors in northern areas tend to benefit from lower property values providing higher yields, whereas southern regions have the lowest yields given the higher housing costs.”