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Top Investment Spots

Top Investment Spots

12.02.20

The latest research by the peer to peer lending platform Sourced Capital of the Sourced.co Group has revealed where is currently home to the best bricks and mortar investment options based on current rental yields across the UK property market.

Over the last five years, investment into the real estate, renting and business sector has increased by 48.4%, one of the largest increases in the non-manufacturing industries behind just the ‘construction’ and ‘other service’ sectors in terms of performance.

Despite Brexit uncertainty hitting house price growth, coupled with changes to tax regulations and a hike in stamp duty thresholds for buy-to-let landlords, the UK property market has stood firm and remains one of the most consistent investment options available in today’s markets.

The average rental yield currently sits at 4% across the UK, but whether you’re investing into your own buy-to-let property or via a peer to peer lending platform such as Sourced Capital, there remains a wealth of property pockets offering yields above and beyond the national average.

Nationally and Regionally

The nation currently offering the best top-line yields is Scotland at 5.8%, closely followed by Northern Ireland at 5.4%, with England also coming in just above the UK average (4.1%).

Regionally, the North East (4.9%), Yorkshire and the Humber (4.5%) and the North West (4.4%) are home to the most favorable rental yields, but what about on a more granular level?

The best buy-to-let spots in the UK

Scotland’s current buy-to-let pedigree is also clear on a local level, with 14 of the top 20 areas for current yields located north of the border.

Glasgow ranks top at present with yields hitting 7.8% on average, followed by West Dunbartonshire (7.2%) and Inverclyde (7.1%).

Burnley ranks at number six and the best in England with the average rental yield currently at 6.6%, followed by Belfast (6.4%).

Other areas outside of Scotland to make the top 20 include Blackpool (5.9%), Country Durham (5.8%), Pende (5.8%) and Hyndburn (5.8%).

In London, Tower Hamlets is currently home to the highest yields at 4.7%, followed by neighbouring Newham (4.6%) and Barking and Dagenham (4.6%).

Founder and Managing Director of Sourced Capital, Stephen Moss, commented:

“One positive that can be taken from months of stagnant house price growth brought on by Brexit uncertainty is that rental yields have seen a boost due to a fall in property values coupled with consistently high rental demand and rental prices as a result.

We’ve already seen a Boris inspired bounce late last year with early signs that the market has ‘bottomed out’ and is once again on the up already in 2020. As a result, we’ve also seen an early flurry of investor activity as they realise now is a great time to get a foot in the door and secure a good deal before prices do regain momentum and the returns available start to tighten.

With the property sector remaining one of the most consistent where investment over the last five years is concerned, we expect to see yet further growth over the year and beyond and whether you choose to invest in your own buy-to-let property or via the peer to peer channel, now is as good a time as any to commit while the market is still finding its feet.”

Nationally
Location Rental Yield
Scotland 5.8%
Northern Ireland 5.4%
England 4.1%
Wales 3.6%
   
United Kingdom 4.0%
   
Regionally
Location Rental Yield
North East 4.9%
Yorkshire and the Humber 4.5%
North West 4.4%
London 4.3%
West Midlands 4.2%
East Midlands 3.8%
South West 3.8%
South East 3.7%
East of England 3.6%
   
Top 20 highest yields in the UK
Location Rental Yield
Glasgow City 7.8%
West Dunbartonshire 7.2%
Inverclyde 7.1%
Midlothian 6.9%
East Ayrshire 6.6%
Burnley 6.6%
Belfast 6.4%
Dundee City 6.3%
Falkirk 6.3%
Aberdeen City 6.1%
Clackmannanshire 6.1%
Na h-Eileanan Siar 5.9%
Renfrewshire 5.9%
North Ayrshire 5.9%
Blackpool 5.9%
County Durham 5.8%
Pendle 5.8%
Hyndburn 5.8%
Moray 5.8%
North Lanarkshire 5.7%
   
London boroughs
Location Rental Yield
Tower Hamlets 4.7%
Newham 4.6%
Barking and Dagenham 4.5%
Greenwich 4.2%
Hounslow 4.1%
City of London 4.1%
Lambeth 4.0%
Enfield 4.0%
Bexley 4.0%
Southwark 3.9%
Hackney 3.9%
Havering 3.9%
Westminster 3.9%
Lewisham 3.8%
Redbridge 3.8%
Wandsworth 3.8%
Brent 3.8%
Harrow 3.8%
Croydon 3.7%
Sutton 3.7%
Islington 3.7%
Bromley 3.7%
Hillingdon 3.6%
Ealing 3.6%
Merton 3.6%
Waltham Forest 3.5%
Camden 3.5%
Barnet 3.5%
Hammersmith and Fulham 3.5%
Richmond upon Thames 3.3%
Kingston upon Thames 3.3%
Haringey 3.3%
Kensington and Chelsea 3.1%
   
Sources
Average house price Gov / Land Reg
Average Private rent
England ONS
Scotland Gov.scot
Wales Gov.wales
Northern Ireland Housing Executive

 

Industry Sub-industry group Sector Total Change 5 year
Total business investment UK x x 13.18%
       
Manufacturing > Private sector x x 20.84%
Non-manufacturing > Private sector x x 12.08%
       
Private sector > Manufacturing Textiles, leather, clothing, and footwear x 150.94%
Private sector > Manufacturing Solid fuels and oil refining x 87.50%
Private sector > Manufacturing Food, drink, and tobacco x 41.24%
Private sector > Manufacturing Other manufacturing x 33.14%
Private sector > Manufacturing Metals and metal goods x 31.01%
Private sector > Manufacturing Engineering and vehicles x 20.36%
Private sector > Manufacturing Chemicals and man-made fibres x 8.53%
       
Private sector > Non-manufacturing Construction x 100.24%
Private sector > Non-manufacturing Other services x 16.25%
Private sector > Non-manufacturing Other production x -3.54%
Private sector > Non-manufacturing Distribution services x -4.69%
       
Private sector > Non-manufacturing > Other production Other production Electricity, gas, and water 24.32%
Private sector > Non-manufacturing > Other production Other production Agriculture, forestry, and fishing 18.32%
Private sector > Non-manufacturing > Other production Other production Mining and quarrying -46.13%
       
Private sector > Non-manufacturing > Other services Other services Other services 54.92%
Private sector > Non-manufacturing > Other services Other services Real estate, renting, and business 48.38%
Private sector > Non-manufacturing > Other services Other services Health and social work 21.74%
Private sector > Non-manufacturing > Other services Other services Information and communication 20.94%
Private sector > Non-manufacturing > Other services Other services Education 20.01%
Private sector > Non-manufacturing > Other services Other services Financial intermediation 1.13%
Private sector > Non-manufacturing > Other services Other services Transportation and storage -19.04%
Private sector > Non-manufacturing > Other services Other services Hotels and restaurants -42.35%
Source: Office for National Statistics

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