In the race for best performing yields, the buy-to-let markets in Northern university towns have kept their leading position across the UK, according to new research by Property Partner.
Research by property crowdfunding platform Property Partner ranked 86 university towns and cities across the UK based on the strength of their local buy-to-let property markets – as indicated by their average net rental yields.
Figures showed the best performing buy-to-lets were located in the North East, with Sunderland in first place with an average net annual yield of 6.9%, followed by Teesside with a net annual yield of 5.6%.
The third best location was Birmingham in the West Midlands, where relatively low-priced assets and a steady demand from students attending the two leading universities in the area – Aston University and Birmingham City University – offer investors an average net annual yield of 4.5%.
In fourth place stands the university town of Salford in the North West, with an average net annual yield just 0.1 percentage point less than Birmingham at 4.4% and an average house price of £131,863.
The picture changes, however, in more Southern parts of the UK, where house price inflation have seen yields on buy-to-let property fall behind those in the North. In fact, six of the bottom ten lowest-yielding properties were located in London and the South East.
Commenting on the results, Property Partner’s CEO Dan Gandesha said: “In this era of ultra-low rates and high market volatility, stable investments which provide a reliable income, and medium to long-term capital growth prospects are the holy grail. Property is a total returns investment, and until recently, it’s been a capital returns play. But with Brexit, the rules of the game are changing. Now our investors are increasingly focussed on the reliable income they can earn, month after month […]”
In other news, the UK’s higher education institutions have seen a rise in demand following yesterday’s A-level results announcement, which saw the number of positions offered to students by universities increase by 3%.