Buy-to-let: UK cities and trends
It’s fair to say that landlords have had it tough of late. However, political uncertainty, Brexit, tax and regulatory reforms aside, the private rented sector continues to thrive across many regions of the UK.
The UK housing market has never been a single entity, it is made up of multiple smaller markets each with its own unique conditions and challenges. This makes it interesting for homeowners, and also means that any property professional needs to closely follow market trends. This is especially apparent within major cities, making Aldermore’s Buy-To-Let City Tracker – which analysis five factors to calculate the best areas for landlords to buy – all the more thought-provoking.
When considering average total rent, short-term yield, long-term return though house price growth over the last decade, vacancy numbers and the rental population, the Tracker identified Oxford as the number one conurbation with a total score of 74. The data showed that 28 per cent of the city is housed through the private rented sector, the average price per room is nearly £600, properties are generally not vacant, and house price growth is strong. The score was dragged back by short-term yields, which the lender reported as being poor.
Manchester and Edinburgh came second, amassing an overall score of 72 apiece, with London next on the list, at 71. Yorkshire dominated the bottom of the 25-city list, with three of the bottom six – Leeds, Sheffield, and Bradford scoring 32, 30, and 29, respectively due to a combination of poor rental prices, low yields and high vacancies. Conversely, Hull came in 12th place scoring 49. This was mainly thanks to a short-term yield of 9.3 per cent – the highest of all the cities examined.
Wolverhampton was at the bottom of the pile as it has the smallest rental market with only 12% of residents privately rent. As a result, vacancies are above average at 3.1% of properties, suggesting that landlords might struggle to always fill their properties.
All of which highlights that understanding trends across all areas of the UK remains key for property professionals to successfully managing their investments and portfolios now, and in the future.