Upcoming & Best Buy-To-Let Areas in the UK 2024
Whether you are a seasoned investor or are simply looking to get involved in the world of property investment, it is always wise to stay up to speed with which areas across the UK are the best buy-to-let areas. The best buy to let areas can range depending on the property you are searching for, but as a rule of thumb you will want somewhere with both a growing population and reputation, where rental yields are high and there is a strong demand for rental properties.
In this blog post, we will be looking at the best buy to let areas, where in the UK has the best rental yields, and how we can help you sell your home in as little as 7 days...
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Where is the best place to buy BTL property in the UK?
In the UK we are spoiled for choice when it comes to the best areas for buy-to-let investment. There are many areas across the UK where BTL investors are thriving thanks to strong rental yields and healthy rental markets.
However, there are some areas in the UK buy-to-let field that are better than others, and whilst the success of your investment will depend upon a variety of factors, the areas in the UK that consistently produce the highest rental yields are in the north. This is due to lower property prices and high rental demand.
Below we take a closer look at the regions that make the best place to buy BTL property in the UK:
|Average gross rental yield
|Average monthly rent
|Average price of a buy-to-let property
|Yorkshire and the Humber
|East of England
Data correct as of December 2023, according to Zoopla Rental Index
Should I invest in London?
Whilst many buy-to-let investors may think that London is the go-to when it comes to property investments, they are often sorely mistaken. Although London is the biggest city in the UK, both in terms of size and population and is a hub for growth and tourism, it doesn't come close to other cities throughout the country when it comes to BTL potential.
Although 30% of the UK's rental supply comes from London, it offers the lowest rental yields in the country at 4.92%. It's no secret that London is the most expensive place to live in the UK, a fact that is further backed up by data from CityRise, which revealed that the average London tenant spends 40.2% of their income on rent. Compare this to the rest of the UK, where the average tenant will spend 28.4% of their income on rent.
Due to the high property prices in London, investment can be unprofitable for buy to let landlords. Furthermore, the rental market in London is 20% lower year on year, however, this is forecast to grow 2%.
Where in the UK has the best rental yield?
When it comes to buy to let investment, an area that you cannot afford to ignore is the rental yields. Rental yields can help you to work out whether or not a purchase will be profitable, looking at the rental income you will receive as a percentage of the price. If you are looking at the net rental yield, you will also need to factor in the cost of maintaining and renting out your property.
Rental yields as a whole have improved across the UK over the last year due to the falling house prices and rising rental rates. In the UK, the average gross rental yield currently stands at 5.49%, with the average property costing £262,288 and the average renting costing £1,200.
According to Zoopla, the areas with the highest rental yield are Sunderland, Dundee, and Burnley, all of which offer between 7.7% and 8.4% rental yields.
Below are some of the best areas for buy-to-let according to the Zoopla Rental Index December 2023:
|Average gross rental yield
|Average monthly rent
|Average price of a buy-to-let property
Which city is best buy-to-let location in the UK?
Exactly which city in the UK is the best buy-to-let location will depend upon a variety of factors such as gross and net rental yields, property price, the type of tenants you are looking for, and the property market in general.
However, there are many cities that will generally crop up as being the best buy-to-let locations for those looking to get started in investment or to expand their portfolios.
These cities are:
What are the Best buy-to-let areas for 2024?
The buy-to-let market is constantly changing and growing, exactly like the open property market. Each year, new cities seem to be making a name for themselves in the BTL market. Whether you are a seasoned landlord or a first-time investor looking to get started, we have compiled a list of best buy to let areas in the UK 2024 according to investment company Joseph Mews:
At the top of our best buy to let areas is Birmingham. A true mainstay in the UK property market, Birmingham is predicted to be a hub of growth, demand, and regeneration in 2024.
A popular choice with young professionals who are looking to leave the rising cost of living in London and instead commute, Birmingham sees a high demand for rental properties each year.
With approximately 100,000 workers and a population that is predicted to reach 1.24 million people by 2030, it is easy to see why investors have high hopes.
Plus, Birmingham boasts a 41% graduate retention rate, bringing with it a constant flow of graduates seeking rental accommodation.
Home to museums, galleries, theatres, shops, eateries, bars, green spaces, and an average house price of £244,741, there is plenty to love about life in Birmingham.
A hidden gem in the midlands and next on our list is the city of Derby. A halfway point between the north and the south, this city is one investors are watching in 2024. Home to museums, busy high streets, fantastic travel links, green spaces, cafes, bars, and more, Derby is a real up-and-coming city.
Derby is currently undergoing the '2030 Derby Masterplan' a regeneration project that aims to transform the local landscape. Furthermore, Derby property prices are on the up, with forecasts predicting that they could increase by 20.53%
over the coming four years and a rental market that is predicted a 12% growth by 2026.
Helping to secure Derby's strong rental market are the 17 univeristies all located within an hour's travel and the 34,000 students who call Derby home. On top of this, around 48% of Derby's population is under 35, further helping to strengthen the market.
Proving time and time again that it can provide investors with strong rental yields is the city of Leeds. Home to the second largest banking and finance sector in the UK, Leeds is a popular haunt with professionals across all sectors who all help to drive up the demand for rental properties.
Leeds boasts a population of around 800,000, with an estimated 73% renting their property making it an ideal location for those seeking for more long-term rental tenants.
With a strong and rapidly growing economy, it's easy to see why the number of people moving from London to Leeds has doubled over the past decade. Whilst the price growth in Leeds may not be as impressive as some of the other cities mentioned on this list, rental forecasts predict that the growth in Leeds will outweigh the national average by far.
With a 13% increase in property value over the last 5 years, it is obvious how Manchester made it on the list of best buy to let locations.
A good indicator of how strong the rental market will be in a city is linked with age. As a rule of thumb, the younger the average age in a city, the higher the demand for rental properties will be. Although the average age in Manchester (33) is slightly higher than what would be expected for a strong rental market, it has a population of over 100,000 students and a higher than average graduate retention rate, making it a surprising rental hotspot.
Manchester has an array of career opportunities and a great reputation for business start-ups, as well as plenty of plans for rejuvenation and redevelopment. Pair these factors with the average rental yield of 7.2% and you can see why investors are running to Manchester.
When it comes to cities with tonnes of potential for the coming years, Sheffield is sure to be top of the list. This city is the perfect halfway point for those looking to enjoy the perks of city living whilst still enjoying the scenery and peace that the countryside brings.
Sheffield has numerous regeneration and redevelopment schemes in the work, helping to transform the city centre and usher in a new property cycle. With rental yields up to 7.6% achievable, it is easy to see why investors are turning their attention to Sheffield.
Home to Meadowhall Shopping Centre, the peak district, a healthy rental market, brilliant transport links, cafes, cinemas, theatres, museums, and more, Sheffield is certainly a city to watch out for.
With a large student population, Liverpool is a city with great investment potential. Its affordable house prices combined with its potential for rental returns means it is a popular choice with those looking to invest.
Although Liverpool has not been subject to the price growth that some of the other cities on the list have been privy to, property forecasts are suggesting that property prices in Liverpool are headed to rise by 11.9% over the course of the next four years.
Furthermore, these conditions lend themselves in buy to let landlords favour as the job opportunities, amenities, and economy mean that landlords are able to charge healthy rental rates.
With a rich history spanning all the way back to 1207, a lively music scene, a rich culture, and more, it's easy to see how Liverpool made its way onto the list.
Combine affordability with a large growing population and strong graduation retention rate, and you will get the next city on our list. Newcastle is the crown jewel of the north and remains consistently present as one of the best areas for BTL investment.
Home to the Baltic, Sage, brilliant travel links, markets, shops, eateries, and bars, it is easy to see why people are flocking to Newcastle.
The Newcastle property market has remained strong despite its problems with growing capital growth. However, these issues bode well for investors, as this means properties are affordable to purchase and rent rates continue to rise.
Another factor in Newcastle's favour is its strong economy. Home to brands such as Greggs, Fenwick, Goldsmiths, and more, Newcastle can hold its own against the other cities on the list.
Next up on our list is the city of Leicester. There are lots of reasons why investors are setting their sights on Lecister in 2024, but one of the main reasons is that it is a hotbed for career opportunities. Some of the biggest large-scale UK employers operate out of Leicester, such as Dunelm, Walkers, and even Next. With a strong economy and demand for work boosted further by the Leicester NHS trust, it's easy to see how it made the list.
Furthermore, Liecister's healthy property market plays a key role in its list placement. With property
prices more than doubling over the last decade, from £121,896 in 2013 to £264,558 in 2023, Lecister has promising price growth.
Home to several universities, there is a strong rental demand for student housing in the city of Leicester and the surrounding areas. It is also home to some excellent travel links including train stations, an airport, and motorways, all of which can lend themselves to short-stay let opportunities for those looking to travel.
Showing incredible growth and potential over the last 5 years is the city of Nottingham. Situated in the heart of the East Midlands, Nottingham is becoming a real up-and-coming city for those looking to invest.
Often referred to as the 'Home of English Sport', Nottingham is home to plenty of sports centers, green spaces, shops, eateries, transport links, and more.
With a high capital growth over the last decade and a strong potential for long-term yield growth in the coming years, Nottingham has many qualities making it ideal for those looking to purchase a buy-to-let home. Furthermore, there is a healthy rental market in Nottingham, as it is home to not one but two universities and a super-hospital so there are plenty of potential tenants in the form of students, graduates, and medical staff to cater to.
Nottingham is also incredibly affordable and offers excellent rental yields both in and around the city centre. Being able to achieve rental yields over 8% can be rare in any city, however, Nottingham city centre has proven the ability to reach rental yields of 8.1%.
Last up on our list of best buy to let locations is Glasgow. The most populated city in Scotland, Glasgow has the perfect formula for buy-to-let investment heaven. With its affordability and the ever-growing potential for high rental returns, Glasgow is set to be a hotbed for investment in 2024.
Home to the 4th largest economy in the UK, generating a whopping £27 billion a year, Glasgow has plenty going for it. It is a city that is seeped in culture and history, with roots dating all the way back to the 6th century. Home to many different museums, music venues, transport links, and universities, it's easy to see why investors are flocking to Glasgow.
Furthermore, Glasgow's industrial and manufacturing background has provided a strong foundation for the local economy, and the recent £118 million investment into the new university campus has caught the attention of those looking to expand their housing portfolios.
House prices in Glasgow have risen drastically over the last decade, sitting at just over £96,000 in 2013, equating to roughly a 136% increase.
Why are landlords leaving the buy-to-let market?
Uncertainty within the buy to let market has been a big reason why many buy to let landlords are selling up and moving on. One of the main reasons behind this exodus is the increased cost of mortgages and an overhaul in the tax system which has led to some landlords feeling penalised.
Furthermore, changes to laws surrounding energy efficiency have led to more confusion as well as changes to the renters reform bill. Many landlords have been left in the dark about their future in the buy to let market and as a result, have sold up.
Is it easy to sell a buy-to-let property?
When it comes to selling your buy to let property, you may find that it is not as easy as selling an untenanted property on the open market. The reason for this is, that buy-to-let properties can come with a lot of red tape, that even seasoned investors may not want to deal with.
The first hurdle you may have to deal with is the fact that the property is tenanted. As a result, the only buyers who will be interested in it will be other investors, which can limit the selling pool. As you will be dealing with limited buyers, this can have a knock-on effect on selling time and the price you achieve.
It is advisable to sell the property without tenants, but if your tenants are halfway through a tenancy, or you are unable to evict them, then you will have to sell with the tenants still occupying the home, which can bring its own limitations.
If a tenant is unhappy with the sale, they can deny property viewings if it is not included in their contract. They can also state that they may only happen at certain times. Tenants have a right to 'quiet enjoyment' so viewings can be seen as a violation of this if not handled well.
When it comes to selling a buy-to-let property, you have three main options. You can either sell using an estate agent, an auction house, or a sell house fast company. As with any selling decision, there are pros and cons to all of these options. Below we take a closer look at how you can sell your buy-to-let property:
Selling through an estate agent is a fairly standard route when it comes to selling a property, buy-to-let or otherwise. One of the main attractions of selling through an estate agent is that they will undertake the legwork of selling your home. An estate agent will take care of all aspects of the sale, from sorting out your listing to advertising it, viewings, and negotiations, for a cut of the final profit.
Whilst a popular selling avenue, one of the biggest downsides to selling through an estate agent is time. It can be a time-consuming process, especially if you have tenants in your buy-to-let property. If your buy-to-let is tenanted, then your tenants will need to agree to viewings, which they may not wish to. As we have already mentioned, tenants have the right to 'quiet enjoyment' so they may decline any viewings.
Another downside to selling with an estate agent is that they may take a while to sell your home. Finding a buyer on the open market can take a little while at the best of times, let alone if you are selling a tenanted buy to let property.
Another route that you may wish to explore when selling your property investment is to sell it via a property auction. A property auction works by setting a minimum reserve price that must be met in order to sell. The best-case scenario for a property auction is that multiple bidders bid on your property and raise the total profit.
A big draw to selling through a property auction is the security they offer. Once the gavel falls, the winning bid becomes legally binding and the buyer cannot pull out without legal and financial consequences.
However, it is worth bearing in mind that property auctions are not without issues. One of the biggest problems that property auctions can bring is the timescale. Auctions involve a lot of waiting, from the marketing, viewings, and valuations. If it is a busy month at the Auction house, you may have to wait even longer for the next one.
Once the auction is complete, you will have to wait another month for the paperwork to go through, which can add even more time to the process.
Furthermore, selling at auction is not without cost. Selling at auction involves paying a fee to the auctioneer to cover the cost of marketing and selling your home, which can eat away at your total profit.
The third option for selling a buy to let property is to sell through a genuine cash buyer. A huge positive to selling through a cash buyer is that they have the cash funds readily available, meaning they do not need a loan or mortgage in order to purchase your property. Unlike an estate agency, they will not have to spend time finding a buyer for you, they will simply be able to purchase your property in a timescale that suits you.
Another advantage is that many genuine cash buyers will cover the legal fees associated with selling for you, meaning the sale will cost you nothing!
If this sounds like something you may be interested in, then look no further. We are The Property Buying Company, a cash buying company that specialises in fast property sales. We can buy any house, in any location, and in any condition. So whether your buy to let property is tenanted or not, we will be able to take it off your hands.
As a genuine cash buyer, we have the cash funds readily available to purchase as soon as you wish to sell. Whether you want to sell your buy to let property in as little as 7 days or as far away as four months time, we tailor our service to suit you.
We are also proud members of The Property Ombudsman and The National Association of Property Buyers, as well as having an excellent rating on TrustPilot.
Plus, as an added bonus we will cover all of the fees you would typically associate with selling your property, it's just one of the ways we make selling easy.
So, if you are ready to sell your buy-to-let property, then get in touch today by filling in one of our free, no-obligation valuation forms to receive your CASH offer, which we could have sitting in your bank in as little as 7 days...