Middlesbrough, Sunderland and Glasgow are among rental-return hotspots

Middlesbrough, Sunderland and Glasgow are among the areas where landlords can find the best rental returns, according to new data.

Property website Zoopla compared average rents across the UK for two-bedroom properties with how much they would typically cost to buy.

They found strong rental yields in the north-east of England and Scotland, with buy-to-let properties in Middlesbrough, East Ayrshire, North Ayrshire and Inverclyde  typically generating rental yields of 7.7%.

In Glasgow and Stirling, typical yields –  the financial return on rental properties – were calculated at 7.6% and 7.5% respectively.

A two-bed property in Sunderland, meanwhile, could give a landlord a yield of 7.4%.

Rental yield is the money a landlord has invested versus rental income. High rents don’t necessarily produce good yield, for example, you may let out a property in London for a large monthly sum, but if your mortgage is high – and you have to add on costs such as service charge – your yield will be lower than in an area where rents aren’t as high.

Tom Parker, consumer spokesman at Zoopla, said relatively low house prices in parts of northern England and Scotland helped generate higher yields for investors.

He added: “Yields are of course one consideration for investors and, for those considering their first foray into the buy-to-let market, it is worth considering house price growth forecasts for an area, and whether rents are likely to rise over time.”

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11th September 2020