Areas of the North of England and Scotland saw the largest increase in rental yields towards the end of 2016, according to the most recent data from peer to peer lending platform Kuflink.
Manchester and Salford saw the largest average rental yields, of 6.7% and 6.6% respectively. Cambridge however saw the worst returns, with typical yields of just 2.7%.
The data examined the average house price and rents in 50 major towns and cities in Britain, then calculated the average rental yield for each location.
Northern England showed the biggest rise in rental yield growth. Hull, Rotherham and Doncaster saw the most prominent increases. In Scotland, Aberdeenshire and Edinburgh saw the highest growth.
Unsurprisingly, cities in the North recorded larger yields than London. Despite the high rents available in the capital, spiralling house price are leaving buy-to-let landlords with only small returns.
Further data from the report shows that there are less than 41,000 properties un under £250,000 on the market in the UK-down from the 58,000 available in October. In addition, there are now less than 2,000 properties under £250,000 on the market in London.
Birmingham saw the largest fall in properties available under £250,000 with a fall of 1373 properties between October and December 2016.
Tarlochan Garcha, chief executive officer of Kuflink, observed: ‘Buy-to-let properties in the North can be a steady investment, attracting renters who cannot afford to step onto the property ladder and therefore choose to rent in good locations, which are well-suited to their lifestyle.’
‘Manchester and Leeds are both bustling cities, popular with young professionals and families, and can offer solid returns for landlords. While Birmingham, which has a growing business district and is soon to benefit from HS2, cutting journey time to London to just 49 minutes, is also firmly on the map as a strong buy to let spot. It could be time for landlords to turn their attention away from pricey London and look to the UK’s regional cities,’ Garcha added.