What property type has the best yields?
New data from lettings management platform offers fresh insight into which property types produce the best yields for investors.
The study found that one-bedroom properties are now proving the best financial investment when it comes to buy-to-let rental yields across the UK’s major cities.
One-bedroom homes now average a rental return of 6.2%, while two-bedroom properties provide a yield of 5.6%.
Meanwhile, three-bedroom properties, which previously offered the highest returns, now provide a rental yield of 4.3%.
When it comes to investing in a one-bedroom buy-to-let, Newcastle offers the highest return, with an average yield of 7.9%, closely followed by Glasgow at 7.7%, Liverpool at 7.1% and Plymouth at 7%.
Newcastle and Glasgow also rank along with Belfast at 6.9% as the best spots for a two-bed buy-to-let investment, with Sheffield (6.7%) and Leeds (6.4%) also proving profitable.
When it comes to three-bedroom properties, Glasgow tops the table at 6.9% among Newcastle, Belfast, Leeds and Liverpool.
Calum Brannan, founder and CEO of Howsy, commented: “We’re seeing a lot of changes to traditional property trends across the sector and the latest seems to be the profitability of the three-bed buy-to-let.
“While still a good investment, on the whole, tenants demand is growing for one and two-bed homes that provide them with a space of their own.
“This growing demand is leading to one and two-bed properties climbing the ranks of profitability due to their lower investment price point and higher demand pushing up rental prices.
“As the threat of the Coronavirus reduces, we will no doubt see this trend reverse as people begin to again feel comfortable about shared living and the better social lifestyle this brings.”
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Rental yields – 1-bed
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Location
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1 Bedroom
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Newcastle
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7.9%
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Glasgow
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7.7%
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Liverpool
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7.1%
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Plymouth
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7.0%
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Sheffield
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6.7%
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Leeds
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6.6%
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Leicester
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6.6%
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Nottingham
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6.6%
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Swansea
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6.6%
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Portsmouth
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6.4%
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Aberdeen
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6.3%
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Newport
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6.2%
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Manchester
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6.0%
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Cardiff
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6.0%
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Oxford
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5.8%
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Belfast
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5.6%
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Bournemouth
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5.5%
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Southampton
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5.4%
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Cambridge
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5.4%
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Birmingham
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5.4%
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Bristol
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5.3%
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Edinburgh
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5.2%
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London
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4.7%
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|
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Average
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6.2%
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Rental yields – 2-bed
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Location
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2 Bedroom
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Belfast
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6.9%
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Glasgow
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6.9%
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Newcastle
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6.9%
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Sheffield
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6.7%
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Leeds
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6.4%
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Liverpool
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6.3%
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Nottingham
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6.0%
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Swansea
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5.9%
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Portsmouth
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5.8%
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Aberdeen
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5.5%
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Manchester
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5.5%
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Birmingham
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5.4%
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Newport
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5.4%
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Leicester
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5.3%
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Cambridge
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5.1%
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Cardiff
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5.1%
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Plymouth
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5.1%
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Edinburgh
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5.1%
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Oxford
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5.0%
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Southampton
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4.9%
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Bristol
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4.8%
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London
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4.2%
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Bournemouth
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4.0%
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Average
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5.6%
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Rental yields – 3-bed
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Location
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3 Bedroom
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Glasgow
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6.9%
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Newcastle
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6.4%
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Belfast
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6.0%
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Leeds
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5.9%
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Liverpool
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5.7%
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Aberdeen
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5.6%
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Manchester
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5.5%
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Swansea
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5.3%
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Edinburgh
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5.0%
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Nottingham
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5.0%
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Birmingham
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5.0%
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Sheffield
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5.0%
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Portsmouth
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4.9%
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Bristol
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4.6%
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Oxford
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4.5%
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Southampton
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4.5%
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Cardiff
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4.5%
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Newport
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4.4%
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Plymouth
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4.3%
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Leicester
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4.1%
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Cambridge
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3.9%
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London
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3.9%
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Bournemouth
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3.0%
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Average
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5.0%
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Rental yields – 4-bed
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Location
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4 Bedroom
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Glasgow
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6.9%
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Edinburgh
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6.4%
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Leeds
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4.8%
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Newcastle
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4.7%
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Bristol
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4.7%
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Belfast
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4.4%
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Aberdeen
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4.4%
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Liverpool
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4.4%
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Birmingham
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4.3%
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Manchester
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4.3%
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Nottingham
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4.0%
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Southampton
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3.9%
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Portsmouth
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3.9%
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London
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3.8%
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Leicester
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3.7%
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Cardiff
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3.7%
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Sheffield
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3.6%
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Newport
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3.6%
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Oxford
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3.5%
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Cambridge
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3.5%
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Plymouth
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3.4%
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Swansea
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2.9%
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Bournemouth
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1.8%
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Average
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4.1%
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Rental yields – 5-bed+
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Location
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5 Bedroom
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Glasgow
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5.5%
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Edinburgh
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5.1%
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Southampton
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4.3%
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Birmingham
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4.2%
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Nottingham
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3.9%
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Aberdeen
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3.9%
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Liverpool
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3.8%
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Manchester
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3.5%
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Bristol
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3.4%
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Newcastle
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3.2%
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Portsmouth
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3.2%
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Leeds
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3.2%
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Leicester
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3.1%
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Cambridge
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3.1%
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Sheffield
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3.0%
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Swansea
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3.0%
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Belfast
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3.0%
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Cardiff
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3.0%
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London
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3.0%
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Plymouth
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2.6%
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Newport
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2.5%
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Oxford
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2.1%
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Bournemouth
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1.6%
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Average
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