Recent research named Liverpool as the top buy to let area in the UK.
The research quoted on the website bridgingandcommercial.co.uk in June 2017 found that in Merseyside, rental yields of around 8% can be achieved, with rents fairly high and property prices relatively low.
The research showed buy to let investing is profitable provided investors choose the right areas. Nottingham at rental yields of 5.6% and Coventry at 5.4% were the next top areas after Liverpool.
Other good areas are Blackpool, Cardiff and Lincoln. There are very few regions in the south of England amongst the top investment areas. The seaside towns of Portsmouth, Bournemouth and Southampton are exceptions.
Although rents in London are high, the cost of London housing does not make the capital a top buy to let investment area. For example, property prices in Kensington and Chelsea average £1.4 million. Even with a low interest rate commercial mortgage, landlords can expect to pay around £27,855 a year in mortgage repayments. London is a better area to invest in for landlords able to purchase property with cash. There have also been restrictions on mortgage interest tax relief that further add to landlord’s costs.
To make a profit, landlords need to buy property at affordable prices in areas where they are likely to appreciate in value. Rents should be at levels that easily cover mortgage repayments and other costs, with extra profit coming from capital growth.