Revealed – top locations for yield-and-capital-growth combined

2 July 2020 | Renting

Revealed - top locations for yield-and-capital-growth combined

A new league table has been produced listing locations where a mix of rental yield and capital growth have given buy to let investors their best returns.

Lettings management platform Howsy has compiled the list which shows that while UK-wide house prices are up just two per cent annually and yields currently sit at five per cent, London outperforms the combined total.

London is the region home to the most favourable combination with an increase of five per cent in property values, while the average buy-to-let returns a four per cent yield. 

The North West offers three per cent growth and four per cent yields, while the South West is slightly better at four per cent annually for both yields and capital appreciation.

“As a landlord, it can be easy to get bogged down in the almost immediate financial viability of a buy to let investment. Understandable given the unpredictability of house price growth in the long-term and so the rental yield available is often the only current data available during the decision-making process” explains Howsy chief executive Calum Brannan.

“However, there are plenty of areas across the UK that might not present the best yields nationally but have delivered a substantially larger return where house price growth is concerned.

“As the figures show, this isn’t restricted to one area of the market, and this is certainly something to be considered when investing. For the majority of landlords, their portfolio is their pension pot and so while ongoing rental income is essential, keeping an eye on cashing out and the overall value of your portfolio when you do is also advised.” 

The platform uses data from the Office for National Statistics and the Ministry of Housing, Communities and Local Government as the basis for its analysis.

Primary level – nations

Location

Annual House Price Growth

Current Average Rental Yield

Combined (For Ranking)

Northern Ireland

4%

5%

9%

Scotland

1%

6%

7%

England

2%

4%

6%

Wales

1%

4%

5%

United Kingdom

2%

5%

7%

Secondary level – regions

Location

Annual House Price Growth

Current Average Rental Yield

Combined (For Ranking)

London

5%

4%

9%

North West

3%

5%

8%

South West

4%

4%

8%

North East

2%

5%

7%

East Midlands

2%

4%

6%

South East

2%

4%

6%

East of England

2%

4%

5%

West Midlands Region

0%

4%

5%

Yorkshire and The Humber

-1%

5%

4%

Rankings – highest combination value

Location

Annual House Price Growth

Current Average Rental Yield

Combined (For Ranking)

Rossendale

18%

4%

23%

Wyre Forest

17%

3%

20%

Pendle

13%

6%

19%

Hackney

15%

3%

19%

Gravesham

15%

3%

18%

Hyndburn

12%

6%

18%

Kensington and Chelsea

15%

3%

17%

City of Westminster

13%

3%

17%

City of Dundee

11%

6%

17%

Leicester

12%

4%

16

This post has originally been featured in Letting Agent Today.