Research by mortgage lender BM Solutions has found that rental returns in the north are considerably better than those in the capital.
The lender made its calculations for the study by taking the level of rent received against the property value, creating an overall figure for 12 regions.
Central London zones one and two returned the lowest yield of 5.5%, while the North East, North West, West Midlands and Wales all yielded 6.4%.
This is despite the fact that void periods have been decreasing in the capital, with just one in five central London landlords experiencing voids in the past three months (down 0.7% from the previous quarter). Conversely, the highest incidence of void periods was in the North East and East Midlands where more than two in five landlords experienced it in the last quarter.
Data analyst Moneyfacts studied the BM Solutions research and concluded that although London rental prices may be high, the properties themselves cost an “equally extortionate amount”, meaning landlords in the capital will generally spend far more servicing their properties than elsewhere in the country.
Phil Rickards of BM Solutions said: "London has long been seen as the centre of the rental market, with demand outstripping supply and the shortest void periods. However, for the greatest return, looking further afield may be just as an attractive option with rental yields clearly higher out of the capital."