Triple your return with buy to let

but to let v deposit

but to let v deposit

Where to buy for best buy to let returns

A recent report from a major UK Bank analysed the potential of the 50 UK locations with the maximum private rental housing stock and ranked them on yield for buy to let investors.

The top five were Southampton, Blackpool, Hull, Manchester, and Nottingham, with yields of between 7.82% and 7.55%.

Southampton

Average property value £209,000 – rental yield 7.82%

Blackpool

Average property value £110,000 – rental yield 7.81%

Hull

Average property value £111,000 – rental yield 7.77%

Manchester

Average property value £140,000 – rental yield 7.60%

Nottingham

Average property value £150,000 – rental yield 7.55%

These figures all look good from relatively low price points set well under the 3% stamp duty land tax threshold.

Of course, it is always more about the property than the town so keep a look out for infrastructure plans and news from major employers in the area to find those top property deals.

Interestingly, of the 50 towns researched nearly half were producing yields of over 5%, making other investment options look pedestrian.

Buy to let v Savings Bond

Example – £150,000 buy to let property bought with £37,500 deposit.

A typical 5 year fixed buy to let mortgage rate is currently charging around 4.5% making payments £421 per month.

A yield of 5.5% is equivalent to a rental of £687 per month which, even with management fees should net at around £618. Profit equals £197 a month.

A typical five year bank savings product would pay just £58.75 a month on the £37,500 invested (rate 1.88%).

The buy to let investment produces three times the income of the savings account.

What is more, you can see when your property has cracks in it, unlike your average Bank.

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