News: UK’s Top Ten Rental Yield Hotspots for Landlords

09-February-2024
09-February-2024 13:12
in News
by Admin
Top 10 Rental Yield Hotspots for Landlords

Where are the best places in the UK to invest in property? We explore the Top 10 Rental Yield Hotspots for landlords, touching on the current rental landscape in Britain and what makes these areas, in particular, so great to invest in.

Despite occasional fluctuations, demand for property in the UK remains generally robust, driven by various factors, including population growth, changing lifestyle preferences, and affordability challenges in the housing market. 

Young professionals, students, and families comprise a significant portion of the rental market. Similar to the sales market, there are notable regional variations in the rental property market. While London and the South East typically have higher rental prices, other regions, particularly in Scotland and Northern England, offer more affordable rental options and stronger rental yields for landlords.

The rise of remote working during the pandemic has influenced rental market dynamics, with some tenants seeking properties with more space and amenities to accommodate home offices. This trend has led to increased demand for properties outside of city centres and in suburban or rural areas with access to green spaces and good internet connectivity.

While the buy to let market isn't without its challenges, investing in property is still lucrative. We explain why and where the areas with the highest rental yields are in the UK.

What Are the Top 10 Rental Yield Hotspots for Landlords?

1. Sunderland

Average rental yield: 8.5%

The northern city of Sunderland is a smaller name on this list – but nevertheless, the rental yields here are not to be sniffed at. It is a city full of buzz while also maintaining a good sense of community. And with stunning beaches nearby, there is potential for this property to be used as an Airbnb let, should you so wish – especially considering the increasing popularity of holidays at home for Brits.

2. Dundee

Average rental yield: 8.07%

Dundee is a city located on the east coast of Scotland, sitting on the north bank of the Firth of Tay. It is the fourth-largest city in Scotland by population and was originally renowned for its thriving jute industry in the 19th Century. 

Dundee has been at the centre of significant redevelopment in the past few years, particularly with the opening of the V&A Dundee, a branch of the Victoria and Albert Museum in London. This addition to the city's cultural landscape has helped boost tourism and rejuvenate the waterfront area.

3. Burnley

Average rental yield: 7.96%

This town in Lancashire was known for its textile industry during the Industrial Revolution. While the textile industry there has quietened over time, Burnley has diversified its economy into sectors such as manufacturing, healthcare, and education.

There's a strong demand for rental properties, particularly among young professionals, students, and families. This demand is fueled by the town's affordable housing options and proximity to major cities like Manchester and Leeds, making it an ideal commuter town.

4. Glasgow

Average rental yield: 7.6%

The metropolitan hub of the West of Scotland has been a long-standing rental hotspot for years. With so many businesses with large bases on the Clyde, there is plenty of demand available here for the rental market – plus a student market too, supplied not just by the University of Glasgow but also the Caledonian University Glasgow and the University of Strathclyde.

5. Middlesbrough

Average rental yield: 7.85%

The demand for rental properties in Middlesbrough is driven mainly by its large student population from Teesside University and industrial workers. The town's affordability makes it an appealing choice for renters, ensuring a consistent demand for rental accommodation.

The town has also undergone a level of regeneration recently. This includes the redevelopment of former industrial sites, the creation of modern housing developments, and the improvement of transport links. These regeneration efforts can enhance property values and attract tenants.

6. Aberdeen

Average rental yield: 7.45%

Aberdeen is widely known as the oil and gas capital of Europe, with a significant presence of major energy companies and related industries.

It's home to the University of Aberdeen, one of the oldest universities in the UK, renowned for its research and teaching excellence. The university attracts students from around the world, contributing to the city's diverse population.

The city has a consistently high demand for rental properties, driven by its large student population and workforce in the oil and gas industry. 

Aberdeen offers a high quality of life, with access to cultural attractions, recreational facilities, parks, and green spaces. Properties located in desirable neighbourhoods with proximity to amenities and transportation hubs tend to attract tenants and yield higher rental returns.

7. Liverpool

Average rental yield: 7.43%

Liverpool's history is deeply intertwined with its maritime heritage. As one of the world's major ports during the height of the British Empire, Liverpool played a significant role in global trade, shipping, and immigration. The city's iconic waterfront, including the Pier Head and Albert Dock, is recognized as a UNESCO World Heritage Site.

Compared to other major cities in the UK, such as London and Manchester, property prices in Liverpool are relatively affordable.

The combination of affordable property prices and rental demand in Liverpool often results in attractive rental yields for property investors. Areas with a high concentration of students or proximity to popular tourist attractions typically offer the highest rental returns.

8. Blackburn

Average rental yield: 7.41%

Like many other towns in Lancashire, Blackburn was a prominent centre for cotton weaving and textiles during the 19th and early 20th centuries. The town's history is reflected in mills and warehouses dotted along its streets, many of which have since been repurposed.

Blackburn has a diverse population, with communities of South Asian, Eastern European, and African descent contributing to the town's cultural tapestry. This diversity is celebrated through cultural events, festivals, and cuisine, making Blackburn a vibrant and inclusive place to live.

While Blackburn has a strong industrial heritage, the town has diversified its economy into sectors such as manufacturing, healthcare, retail, and professional services. This economic diversity enhances the town's resilience and attractiveness to investors, providing opportunities for growth and development in various industries.

Property and cost of living are cheap, and its proximity to major cities and employment hubs increases the demand for housing, particularly rental properties.

9. Hull

Average rental yield: 7.3%

Hull is a port city in the East Riding of Yorkshire, England.  In 2017, Hull was designated as the UK City of Culture, which brought international attention to the city and spurred significant investment in arts, culture, and regeneration.

Hull is home to the University of Hull, which offers a range of undergraduate and postgraduate programs across various disciplines. Hull has undergone extensive regeneration efforts in recent years, particularly in its city centre and waterfront areas. Projects such as the Fruit Market development, Hull Venue, and Hull New Theatre have transformed former industrial sites into modern residential, commercial, and leisure spaces, attracting investment and enhancing the city's appeal.

The presence of the University of Hull and other educational institutions ensures a steady stream of students in need of accommodation, while the city's growing economy attracts workers seeking rental housing. Areas with a high concentration of students or proximity to employment hubs typically offer the highest rental returns.

10. Grimsby

Average rental yield: 7.07%

Grimsby has a rich maritime history dating back centuries. It was once one of the largest and busiest fishing ports in the world, known mainly for its thriving fishing industry, especially in the catching and processing of cod. Although the fishing industry in Grimsby has faced challenges, it remains an integral part of the town's identity and economy.

Grimsby has become a hub for the renewable energy sector, particularly offshore wind energy. The town's port facilities and proximity to offshore wind farms in the North Sea make it an ideal location for the construction, maintenance, and operation of wind turbines.

As Grimsby continues to undergo regeneration and development, property values are expected to appreciate over time. Investors who purchase property in up-and-coming areas or during the early stages of regeneration projects may benefit from significant capital appreciation in the future.

As well as this, the property market in this area is stable and affordable, with consistent demand for rental properties from locals.

Is it Still Worth Becoming a Landlord in the UK?

The rental market has seen a myriad of changes in recent years. From COVID to changes in buy to let regulations and rising interest rates, landlords and renters alike have been affected significantly. 

Is the rental economy still thriving? Many experts say yes. While legislation around buy-lets has become more stringent since 2022, the rental market is still lucrative. 

As we have explored in this blog, there are a variety of affordable towns and cities in the North where property prices remain relatively static, but rental demand is increasing. The consistently high demand for rental properties has resulted in low vacancy rates in most areas across the country. This allows landlords to maintain high occupancy levels and generate consistent rental income.

Are You Looking to Invest in a Buy-to-Let?

We can help. At Clifton Private Finance, we have relationships with high street, private and specialist lenders across the industry. Our dedicated team of mortgage brokers can offer you tailored advice on your options and guide you through the mortgage process.

Working with a broker can ensure you have access to the best deal for your circumstances, including market-leading rates and bespoke finance solutions. We have expertise working with complex circumstances, such as income structures, foreign currency earnings, and asset portfolios. 

Where appropriate, our team can take a holistic view of your wealth and put you in contact with the most suitable lender. 

We offer creative solutions for landlords who wish to purchase or remortgage buy to let properties. Call our buy-to-let team on  0117 332 5491 to discuss your requirements, or book a call-back below.

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