London has topped the list of the best buy-to-let investment postcodes in the UK, finds a research by London sales and letting agent Benham and Reeves
A research by London sales and letting agent Benham and Reeves has revealed the areas in London and the UK which offer the best buy-to-let yields.
It used statistics from PropertyData based on the average property price and rental potential of each postcode to highlight where is still a sound investment when looking for a healthy return.
The research unveiled pockets in London that offer rental yields as high as 5% despite uncertainty looming over the London market.
The E6 and IG11 postcodes are the best areas for buy-to-let investors in the capital, with both the locations offering a rental yield of 5%. The data revealed that East London topped the list of 10 most lucrative buy-to-let postcodes, closely followed by Romford postcodes RM8, RM9 and RM10, which offer rental yields of 4.9%.
Other London postcodes which made it to the list, include N18 which offers a rental yield of 4.8%, the postcodes SE28, E15 and EN3.
Apart from the capital, Liverpool’s L7 postcode was the best postcode across the UK, with an average price of just £105,000, offering an average rental yield of 10.7%, closely followed by the neighbouring L6 postcode where yields are currently 10.4%.
Other postcodes across the UK offering the highest buy-to-let rental yields include Middlesbrough, Manchester, Bradford, Sunderland, Newcastle, Sheffield and Nottingham.
Marc von Grundherr, director of Benham and Reeves, commented that the DNA of the London rental market is so complex that it pays to consider where to invest on the most granular level possible when looking at the buy-to-let market.
While there are a host of factors that affect the rental desirability of a property, one of the best starting points to work from is the rental yield available. And, despite challenges hitting the sector, buy-to-let remains a lucrative business with plenty of ‘honey pots’ that can bring a great return on investment, he said.
Marc added that of course, London’s more prime postcodes are always a safe bet, attracting investment due to their prestigious image and positioning. While there may have been some decline in price growth due to political uncertainty, they remain very much in demand from a rental point of view and so far, those with the budget to buy there, a return isn’t hard to come by.
He concluded that they also offer better capital growth than London’s peripherals and for those not completely dependent on yield but preferring to opt for more long-term growth, inner London is still the go-to place to invest in the capital’s buy-to-let market.