Sheffield has been revealed as the unlikely hotspot where buy-to-let landlords could make the highest profits on their lettings.
A buy-to-let “heatmap” compiled by TotallyMoney.com shows would-be property moguls an at-a-glance view of the potential yield from rental properties across more than 2,600 UK postcode districts.
Sheffield city centre (S1 postcode) delivers a table-topping 11.1% yield, closely followed by Aberdeen (AB24) and Bradford (BD1) offering yields of 10.4% and 9.2% respectively;
Northern and Scottish investors have the best chances of realising a buy-to-let yield above the national average of 4.17% while the average 3.4% buy-to-let yield for London postcodes is lower than for any other UK city.
The heatmap reveals the yield achievable in more than 2,682 postcode districts across England, Scotland and Wales, with data compiled from analysis of 751,600 properties on the market for sale or rent.
The study reveals a clear geographical divide between The North and The South with northern regions coming out on top and The South East showing particularly poorly.
Nine out of the 10 highest yielding postcode districts are in Scotland and the North/Midlands regions. The 10 lowest yielding postcodes, with the exception of Macclesfield in East Cheshire, are all in Greater London and the South East.
Investors looking for higher yields would do well to avoid investing in buy-to-let properties in London: the average yield for London properties is 3.4% compared to the 4.17% national average.
It’s not all bad news for the capital – Plaistow tops a short list of London postcodes in which above average yields can still be earned.
Nigel Pocklington, CEO of TotallyMoney.com said: “Although property prices are rising faster in London than the rest of the UK, this growth rate hasn’t been mirrored in rent prices. Property investors looking for high yields on rental developments could see the best returns from northern cities or Scotland.”