Industry news


Best places to rent out property in the UK revealed


The city of Manchester is the best place for people to buy property and let it out to tenants in the private rented sector according to analysis carried out by the website GoCompare. Manchester was rated as the best place to rent out a house with an average yield of 5.55 per cent. GoCompare researched the best areas for renting


out a house and ranked them by average property price and rental yields, population under 35, number of properties available, number of letting/maintenance agencies, number of new housing developments, properties currently available for rent and rental price growth.


RENTAL PRICE GROWTH If you are considering renting out your house, a key aspect to consider is how fast the local rental price is growing, so you can predict how much you will be able to raise the rent of your house in the next few years. • Manchester takes the leading position on the ranking with a growth of 5.76 per cent.


• In second position with 5.3 per cent growth is Leicester.


• Cardiff is in third position with a growth of 5 per cent.


AVERAGE YIELD The average yield of a property determines the profit you will obtain for renting it out - and its rise or fall will establish how much of a return the owner gets. • Manchester holds the top position again. The average yield there is 5.55 per cent, putting the city in a great position for property owners.


• Sunderland takes the second position for yield with 5.37 per cent - its best quality in terms of renting opportunities.


• Liverpool is a hotspot for owners, occupying the third place with an average yield of 5.05 per cent.


AVERAGE PROPERTY PRICE In deciding between renting or buying a house, money is one of the main aspects to consider. The actual prices of properties will determinate if renting out is worth it: • Stoke-on-Trent is in the least expensive area to buy property with an average property price of £106k, making the city the best place to buy a property and rent it afterwards. Landlords


Student hotspots in the north are the best bet for buy-to-lets


Buy-to-let landlords squeezed by recent tax changes are being advised they may find better returns by targeting northern towns and cities with sizeable student populations. University towns and cities where housing is


cheap, such as Liverpool and Middlesbrough, are providing rental yields up to seven times higher than in London, a study by credit specialists Totally Money has found. The effect of the three per cent stamp duty surcharge is also mitigated by buying cheaper property. Its report compared average rents to house prices


to highlight the most profitable places for buy-to-let and named a pair of postcodes (L6 and L7) close to two of Liverpool’s three universities as a hotspot for property investment - with rental yields of almost


Surge in landlords remortgaging their businesses


Growing numbers of private landlords are remortgaging their businesses to obtain lower interest rates, rather than looking to buy more properties, according to a leading funder’s survey. The gap between landlords looking for a better rate


12 per cent. Average monthly rents in the two postcodes were


£1,162 and £1,046, according to the research, whereas house prices were £118,225 and £109,940, respectively. Middlesbrough’s TS1 town centre postcode,


home to Teeside University, took third place, with an average rental yield of 10.94 per cent. The area has modest average rents of £595 per month but a low average asking house price of just over £65,000, makes it one of the most affordable spots to buy into. Landlords whose hearts are set on a buy-to-let


investment in the capital should look to east London for the best returns. East Ham, Plaistow, Manor Park, Chingford, Stratford, and Poplar all


and those raising capital is now the widest in five years. Paragon’s latest Financial Adviser Confidence


Tracking Index reports that 52 per cent of Buy to Let mortgages in Q1 of 2018 were from landlords seeking to remortgage. This is up from 29 per cent in Q1 of 2015. During the same time period, mortgage


intermediaries say they have seen a drop in the proportion of mortgage applications from first time landlords, down from 19 to 13 per cent of the total, as well as a fall in landlords remortgaging to raise funds to


Manchester


in this area have the best potential to make good profits.


• Oxford is one of the most expensive cities to buy a property with a price of £411k. Even though the city has one of the highest property prices, it might be good to consider renting out your property. The city is known for its university and the huge amount of students moving there looking for a place to leave while they start their university life is quite significant.


• London is in first position with the highest price rents, but also the highest purchase prices. The gentrification of areas and the facilities people have to move, plus the growing offer of jobs in the capital have made London the most expensive city to buy a house. Renting out is an option that needs to be considered really carefully.


rank in the top 10 London postcodes for rental profits. At the other end of the spectrum, the worst


performing area outside of London was Bournemouth’s BH14, which has average rental yields of 1.68 per cent. Crewe’s CW12 comes next, with 1.74 per cent. All postcodes in the 25 highest yielding areas


have average house prices of below £300,000, suggesting that more affordable house prices generate better rental yields than hoping that costly properties will rent for more. Totally Money’s Joe Gardiner said: ‘With students


flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords. Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.’


expand their property portfolios, down from 39 to 22 per cent. Among those landlords looking to remortgage,


the proportion seeking to secure a better interest rate reached the highest ever level in Q1 of 2018. Some three years ago equal numbers of landlords


were remortgaging for a better rate and to raise capital. In Q1 of 2018, 60 per cent of landlords said


getting a better interest rate was their primary objective, while 30 per cent of landlords said raising capital was their top priority. This represents the biggest gap since 2013.


www.housingmmonline.co.uk | HMM July 2018 | 23


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