According to research from Lendinvest, the north west of the UK has outperformed everywhere else in the country when it comes to rental yields.
Over the last 5 years, cities such as Manchester and Liverpool have topped the rental yield charts with Manchester producing yields of over 6% and Liverpool over 5%. This compares to London where the average yields were 4.8% in Greater London and 4.7% in Central London. In fact, compared with London, it is estimated that investors could potentially achieve yields that are 200% higher than the capital.
Outside of London, it is cities such as Manchester, Liverpool, Birmingham, Bristol and Leeds that are seeing strong rental growth. The one thing that all these cities have in common is that they all have significant university populations with over 22% of people renting.
Of course, it’s not just the students that are renting. These cities also attract many young professionals who prefer the flexibility and lifestyle that renting gives them.
The standout city in this respect is Manchester. With Europe’s largest student population and a thriving young professional market, the demand for rental property is high and this is why Manchester is currently commanding some of the highest rental yields in the country for property investors.
It is estimated that Manchester needs around 4,000 new build-to-rent properties every year to keep up with demand. However, there is less than half this number being built, further exacerbating the demand and supply issue in the city. For investors this spells good news, with rental prices being pushed up as a direct result.