Landlords looking for the UK’s best buy-to-let areas in 2019 should consider Colchester and mark Central England as an area to watch, while Northern towns and cities feel the knock-on positive effects of recent investment in Manchester.
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LendInvest’s latest buy-to-let index is out, and it makes interesting reading for landlords looking to expand their portfolios.
Colchester is currently the best place to buy-to-let in England and Wales. The town ranked highest for rental price growth (6.5 per cent), which is 3.32 per cent higher than the second place location. Colchester’s rental market is thriving due to fewer young people accessing the property ladder and limited development in the market.
Stockport takes second place, with a rental price growth of 3.18 per cent. However, it’s rental yield of 3.75 per cent and capital gains growth of 6.34 per cent are actually higher than the number one town. Stockport has climbed an impressive 18 places since the LendInvest June 2018 report, and it’s suggested that this success is due to recent investment in neighbouring Manchester.
Manchester itself has risen back up the table from fifth in June 2018 to third, showing strength in capital gains and rental price. Elsewhere in the North, Leeds (12) and Harrogate (19) are tipped as ones to watch.
Where are the best buy-to-let areas?
The buy-to-let index is compiled using data from the Land Registry and Zoopla, and ranks English and Welsh postcodes based on the key metrics of rental yield, capital gains, rental price growth, and transaction volume growth.
To calculate rental yield, the annual rent received on a property is taken as a percentage of its market price.
Enfield has climbed 34 places since July to take ninth position in the latest LandInvest table, bucking the general downward trend in the rest of the Southeast. However, LendInvest has singled out Central England as the buy-to-let region to pay most attention to.
The Midlands is an area for landlords to keep an eye on, with Birmingham achieving a top 10 position for the third time. The city benefits from a huge professional service sector (creating a substantial tenant pool), the forthcoming HS2 rail line that will speed up train times into London, and significant regeneration in the city.
Wolverhampton, too, has climbed more than 20 places to achieve the number 7 spot, with Peterborough joining them in the top 10.
According to the research, here are the 10 best buy-to-let areas 2019:
Best buy-to-let areas for capital gains
Along with a high annual rental yield, for landlords looking to make a profit in the long-term, capital gains is an important consideration when expanding a property portfolio.
While Canterbury leads in this report with capital gains of 7.83 per cent, Sutton (6.47 per cent) and Coventry (6.36 per cent) take second and third place, respectively.
Top 10 areas for capital gains in the UK
Best buy-to-let areas for rental price growth
Towns in the Southeast perform well in the best buy-to-let areas for rental price growth, with Colchester taking the number 1 spot (6.5 per cent), Enfield coming in second (4.25 per cent), and Romford in sixth place (3.53 per cent).
The North also features prominently in the table. Harrogate comes in at number 4 (4.14 per cent), Bolton takes ninth place (3.46 per cent), and Leeds, behind that by just 0.01 per cent, makes it in at number 10 (3.45 per cent).
Top 10 areas for rental price increase in the UK
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Best buy-to-let areas in Scotland
But what about the best buy-to-let areas north of the border? Research from Totally Money also considers Scotland, and reveals that while London may suffer from low rental yields, the same can’t be said of the Scottish capital city.
Five Edinburgh postcodes are among the top buy-to-let hotspots in Scotland, thanks in part to the fact that it’s a university city. The same higher education effect can be seen in Glasgow and Aberdeen.
- Aberdeen’s AB11 postcode is number 1 in Scotland, and is the only Scottish postcode to make it into the top 25 buy-to-let areas in Britain, while AB24 is fifth in Scotland
- Edinburgh’s EH11 takes second place in the table, with EH3, EH6, EH7, and EH8 also featuring in the top 10
- Glasgow’s G20 and G12 take third and fourth place, respectively, while G3 just makes the cut, coming in at number 10
Best buy-to-let areas 2018 – a rental heat map
Looking for a quick snapshot of the best buy-to-rent areas in the UK? Take a glance at the buy-to-let heat map below for an easy overview.
From Colchester, rated as the best area to buy-to-let, to South West London – in 10th place on the list of the bottom 10 buy-to-let UK postcodes, according to LendInvest – here’s where to buy property for rental.
Image source: LendInvest