The Best European Locations for Buy-to-Let Investment!
The best European location for buy-to-let investment is Ireland once again, according to new research by WorldFirst.
The latest European Buy-To-Let League Table showed an increase in Ireland’s average rental yield from 6.54% in 2016 to 7.08% keeping it at the top of the list. The growth of Ireland’s economy is continuing it’s upwards trajectory maintaining its spot as one of the fastest growing in the Eurozone and it seems to positively be impacting the rental market.
The average rent per year on a one-bedroom apartment in an Irish city is now at over £12,000 per year making it the second most expensive country to rent in within the EU after Luxembourg, which costs over £14,000 per year.
With sale prices also on the increase, the average price of a one-bedroom apartment in an Irish is now over £168,000.
Following behind are Malta, Portugal, the Netherlands and Slovakia, all with rental yields over 6%. All four countries have relatively low house prices yet strong rental yields providing an opportunity to earn a decent extra income.
Meanwhile in the UK the rental market is beginning to hit buy-to-let investors with yields falling from an average of 4.91% to 4% over the past year. The latest table from WorldFirst comes a year after Stamp Duty changes came into force, significantly increasing costs for those who are investing in additional properties.
Sitting at the bottom of the table are also Sweden, Croatia, France and Austria. All of these countries have returns of less than 4% due to high house prices and stagnant rents. Sweden has taken the bottom spot for the third time due to a tightly controlled rental market.
The falling pound has led to a significant rise in costs of purchasing a buy-to-let abroad. A one-bed apartment in Ireland will set you back £12,000 more than it would in 2016 and if you were to purchase the same property in Luxembourg it would cost £25,000 more.
Those who have purchased a property before the recent fall, will see return from their rental income increase by up to 8%, getting £900 more per year for a one bedroom flat in Ireland.
Commenting on the research, Edward Hardy, the Economist at WorldFirst, says: “The correlation between a country’s housing sector and the health of the wider economy is clear. It may now be the case that the deteriorating dynamics of the UK’s rental market is sounding the alarm for a wider slowdown in residential housing, and thereby broader economic wellbeing.
“While the UK remains in a purgatory-like state between EU membership and Brexit, long-term investment decisions have become increasingly difficult to make, and falling returns for property investors could mark the beginning of the end for one of the UK’s most successful investment avenues of the past 25 years.”