The 5 Best Cities for Rental Growth
By |Published On: 9th August 2015|

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The 5 Best Cities for Rental Growth

By |Published On: 9th August 2015|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

The buy-to-let boom has been brought to the forefront of property news recently, as landlords have been hit with a reduction in tax relief on their mortgages.

But some buy-to-let investors have benefitted from buying in the past 12 months, in areas with reasonable house prices and soaring rents. This puts London out of the picture, as house price growth has overwhelmed yields.

Cities/towns with the highest growth in rent prices

Position

City/town

Annual rent growth

1 York 26%
2 Edinburgh 19%
3 Oxford 18%
4 Milton Keynes 15%
5 Coventry 14%

Property group CBRE has studied the 29 most economically significant towns and cities in the UK, and here are the top five where property investors purchased last year:

York

York is full of medieval property, Georgian town houses and cobbled streets. But despite this picturesque landscape, house prices are 10% lower than the national average. Buy-to-let investors can therefore pick up a bargain and make substantial yields.

Rent prices in the city rose by 26% in the last year, according to CBRE. Students going to the universities and young professionals are driving up demand, and subsequently rents, to an average of £901 per month.

The 5 Best Cities for Rental Growth

The 5 Best Cities for Rental Growth

Edinburgh

Edinburgh’s arts festival and film festival contribute £261m to the Scottish economy every year, and the city has expected GDP growth of 30% in the next ten years, making it a thriving area.

Earnings are 20% higher than the UK average and landlords may be attracted to the growing luxury development quarter in central Edinburgh.

Oxford 

Various industries, including motor manufacture and bioscience, bring workers into Oxford. These professionals often want to rent before they buy. The city has also seen a rise in wealthy foreign students, who also look for high quality rental homes.

However, investors should be aware that house prices in Oxford have soared. Additionally, the surge in potential tenants is expected to ease.

Milton Keynes 

The town of Milton Keynes is the fastest growing urban area in Europe. Its growing population has caused a huge demand for housing, which has driven up rental prices by much more than the national average of 4%.

Furthermore, Milton Keynes is becoming a popular choice for commuters, with trains to Euston and Clapham Junction.

Coventry

The birthplace of St George has two big universities – Coventry and Warwick. The large student population has one of the highest rates of house sales in the country, as tenants become buyers.

Most cities have a gap between its cheapest and most expensive streets, but Coventry’s housing wealth divide is particularly marked.

The top 5 buy-to-let hotspots

City/town

Average rent per month Average house price growth in past year Average house price Population growth by 2020 Population in 2020

Average age of resident

York £901 3% £228,907 3% 210,263 39.5 years
Edinburgh £942 21% £260,647 8% 525,341 38.5 years
Oxford £1,459 16% £431,143 -1.7% 149,867 34.3 years
Milton Keynes £949 3% £237,399 8% 282,131 36.1 years
Coventry £677 0% £162,788 7% 355,990 36.8 years

 

 

 

 

 

About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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