Thinking about becoming a UK landlord and looking for maximum returns?When it comes to buying, buying, letting out, it's important to have an in-depth understanding of UK rental returns.
The current average gross rental return in the UK is 549%。The average buy-to-let in the UK** is £262,288 and rents are £1,201.
Over the past year, returns have improved across regions as UK house prices have fallen and rents have continued**.
Top 10 cities in the UK with the best rental returns
Sunderland, Dundee and Burnley topped the list of cities with the highest rental returns in the UK, with average total returns close to or over 8%.
Cities in the north of England and Scotland generally have higher returns than cities in the south of England and London. This is because housing prices are relatively high in the southern region.
Glasgow and Liverpool also made the list, with total returns of 790% and 743%。With relatively low average house prices, good job prospects, and a large number of students, these cities offer attractive opportunities for property investors.
The area with the best rental returns in the UK
Regionally, the highest rental yields are mainly found in the north of the UK.
Rents in the North East are cheaper than in other areas (£671), while buy-to-let properties also have a relatively low average** of £109,715, resulting in an average return of 734%。
This is followed by Scotland (732%), Northwest Territories (652%), Northern Ireland (624%) and Wales (623%）。
In contrast, London has the lowest average total return of just 492%。Landlords have been constrained from investing in London in the city due to low house price growth in recent years, new regulations in place, and rents that appear to have reached the upper limit on what can be paid.
Best location for rental returns by region in the UK
When looking for a place to buy a house to rent, it is very useful to know what is going on in your area.
Here are the regions with the highest average returns in each UK region:
Northeast region
Middlesbrough - 852% gross rental return.
Sunderland - 850% total rental yield.
Hartlepool - 831% gross rental yield.
Scotland
East Ayrshire - 957% gross rental return.
West Ton Barton Shire - 915% gross rental return.
Renfrewshire - 913% gross rental return.
Northwest Territories
Burnley - 841% gross rental return.
Liverpool - 757% gross rental return.
Heideben - 747% gross rental yield.
Wales
Brane-Gott - 738% total rental return.
Port Nice Talbot - 723% gross rental yield.
Mercer Tide Field-722% gross rental return.
Yorkshire and Humber
Hamburg - 730% gross rental return.
North East Lincolnshire - 707% total rental return.
Barnsley - 702% Total Rental Return.
West Midlands
Stoke-on-Trent - 709% gross rental return.
Newcastle Ander Lime - 652% gross rental return.
Coventry - 646% gross rental yield.
East Midlands
Nottingham - 706% total rental return.
Mansfield - 640% gross rental return.
Boston - 639% gross rental return.
Southwest
Plymouth - 632% gross rental return.
Gloucester - 620% gross rental yield.
Swindon - 606% total rental return.
Eastern region
Great Yarmouth - 613% gross rental return.
Finland - 605% gross rental return.
Peterborough - 604% gross rental return.
Southeast region
Southampton - 642% gross rental return.
Gosport - 610% gross rental return.
Portsmouth - 609% gross rental return.
London
Barking and Dagenham - 624% gross rental yield.
Newham - 578% gross rental yield.
Bexley - 562% gross rental return.
The outlook for buy-to-let in the UK
Tenant demand is now one-third higher than the average of the past five years, while relatively little new investment has resulted in a shortfall. We expect rents to be **5% to 8% next year.
In addition, there is still room for UK house prices. If house prices are priced and rented, the total rate of return will continue to increase.
However, there are signs that the rental market is about to shift and rental growth has peaked. Annual UK rental growth is expected to halve to 5% to 8% in 2024, the lowest level since 2021.
For middle- and high-net-worth individuals, understanding the market characteristics of different regions and combining them with current market trends will help them make more informed real estate investment decisions.