Recent research of more than 2,500 UK postcodes has revealed the locations that generated the highest average yield (return) for investment property during 2016. The figures were calculated using the median annual rent and median asking price for property in a given area, and do not take into account tax, mortgage payments or management charges and so are gross rather than net percentages. The national average gross yield for buy to let property during 2016 was 4.17%, and as you will see the below areas are significantly higher than this:
1st – Sheffield City Centre (S1) – 11.06%
2nd – Old Aberdeen (AB24) – 10.43%
3rd – Bradford City Centre (BD1) – 9.18%
4th – South Manchester (M14) – 8.71%
5th – North Southampton (SO17) – 8.62%
6th – York City Centre (YO1) – 8.61%
7th – Greenock (PA15) – 8.50%
8th – Aberdeen City Centre (AB11) – 8.12%
9th – North East Glasgow (G44) – 7.90%
10th – Paisley (PA3) – 7.85%
Looking ahead to 2017 there is some uncertainty as to what is going to happen in the UK property market. A lot of sources have suggested that we are likely to see small drops in property values across the country of around 1% or thereabouts, probably more in Greater London, before things begin to improve again in 2018. Other sources have suggested that there will continue to be steady increases in prices across the UK, with the exception of London, with the South West, South East and Midlands performing best.
Regardless of what happens in the wider market, buy to let property remains a sound investment. Rental yields are strong and there is high demand for rental property across the country. Buy to Let mortgage rates are at a record low, and the first part of the year is typically the perfect time to secure a great deal.
One 77 Mortgages provide fee free mortgage and protection advice to our customers from around the UK. We deal in all forms and sizes of residential mortgages, and can also deal in other forms of property finance including auction finance, bridging finance and commercial mortgages.
One 77 Mortgages would like to wish everyone a very happy and prosperous New Year, and we look forward to speaking to you in 2017.