A recent study by digital mortgage firm Molo has pinpointed the UK’s top areas for buy-to-let rental yields. Drawing from its internal data, Molo’s research sheds light on the most lucrative destinations for property investments, offering landlords a clearer perspective on where to maximize their returns.
According to the National Residential Landlords Association, landlords have been grappling with shrinking profits. However, Molo’s findings reveal a glimmer of hope, with England and Wales boasting an average rental yield of 4.98%.
One of the standout revelations from Molo’s research is the launch of a user-friendly rental yield calculator. This tool empowers landlords to quickly assess the profitability of their existing or prospective property ventures, allowing for easy comparisons between different locations.
Central Valleys in Wales Emerges as the Top Location
Molo’s findings position Central Valleys in Wales as the undisputed leader in rental yields, boasting a remarkable 7.96% gross yield—nearly double the national average. The attractiveness of this area is bolstered by an average monthly rent of £697, which, while lower than some regions, is complemented by an average property price of just £100,786, making it one of the most affordable markets in the country.
Francesca Carlesi, the CEO of Molo, emphasized that areas with a high demand for properties, such as commuter cities and those in the north with low property prices and high rental rates, are prime targets for landlords. Carlesi also stressed the importance of considering fast-growing cities and university areas, which offer a steady stream of tenants and robust capital investment growth.
Top Five Locations for Rental Yield
Following Central Valleys in Wales, the next best location for rental yields, according to Molo, is Hartlepool and Stockton-on-Tees in the North East of England, boasting a substantial gross yield of 7.90%. Here, the average monthly rent is £592, while the average property price stands at £85,774.
South Teesside takes the third spot in the rankings, with an impressive gross yield of 7.66%. Swansea secures the fourth position with a gross yield of 7.30%, closely followed by Coventry, offering a gross yield of 7.06%.
Molo’s research provides a comprehensive view of the top 10 locations, all of which are situated in the North, Midlands, or Wales, presenting a promising outlook for landlords seeking high rental yields. Conversely, the study also reveals that the bottom 10 locations are concentrated in London and the South East, highlighting the regional disparities in the rental market.
As landlords navigate the evolving property landscape, Molo’s insights offer valuable guidance on where to focus their investments, with the Central Valleys in Wales shining brightly as the crown jewel of rental yields in the UK.