If you’re a would-be landlord or a landlord looking to build up a portfolio, you’ll need to decide where to invest – whether, for example, to head north to big cities such as Manchester and Liverpool or to invest in the capital, where rents may be higher, but yields will be low.
A new interactive tool from GoCompare can show you the best areas to currently invest in, including data on average property prices, average yields (which determines the profit you will get for renting it out) and rental price growth. It also looks at the number of people in the city aged under 35, as millennials are prime tenants that landlords can focus on. Plus, you can also compare two different cities to decide which offers you the best returns.
According to the tool, the top 10 UK cities to be a landlord are:
- Newcastle upon Tyne
Manchester is rated the best city to rent out a property, with the highest average yield in the UK of 5.55%, annual rental growth of 5.76% and 5,545 properties available to rent.
Surprisingly, London comes in second place with 50,728 properties to rent, despite the fact that it has a small average yield of 3.05% and annual rental price ‘growth’ is actually in decline at -1.12%.
When it comes to where landlords can afford to invest, Stoke-on-Trent is the least expensive area to buy with an average property price of £106,000. In contrast, Oxford has average property prices of £411,000 while in London, the average price is £484,000.
Meanwhile, Manchester comes top for annual rental growth, at 5.76%, followed by Leicester at 5.3% and Cardiff at 5%.
Manchester also holds the top position for average yields at 5.55%, followed by Sunderland at 5.37% and Liverpool at 5.05%.
To compare cities and try out the tool, see below: