The North East tops the UK for rental yields

The North East tops the UK for rental yields

0:04 AM, 11th October 2024, Less than a minute ago

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The North East of England has emerged as the UK’s top region for rental yields with landlords achieving average returns of 8.13%, Paragon Bank reveals.

It found that the region outperforms other parts of the country, including Wales (8.07%) and the North West (7.84%).

Paragon’s report also highlights the strong rental yield potential in Yorkshire and Humber, where landlords can expect returns of 7.54%.

This puts the region in fourth place on the national rental returns table.

Buy to let home purchases

Paragon’s managing director of mortgages, Louisa Sedgwick, said: “Our latest report draws on industry data to reveal that, during the last decade, the north of England has surpassed the south in terms of the proportion of buy to let home purchases.

“I think one of the reasons why the region has increasingly gained the attention of landlords is the opportunity to generate strong returns on investment.”

She added: “Demand for rented homes is high in the north, as it is across the UK, and with property that can be significantly more affordable to buy compared to southern regions, landlords are able to respond, confident that they will be able to achieve above average yields.”

Relative affordability of property

Paragon attributes the high yields in the North to the relative affordability of property in the region.

The Office for National Statistics’ housing affordability report reveals that the most affordable local authorities in England and Wales are located in the North East, North West and Yorkshire and Humber.

The report also highlights housing affordability by comparing house prices to annual workplace-based earnings.

In England and Wales during 2023, homes cost an average of 8.3 times a full-time worker’s yearly salary.

In the North East, North West, and Yorkshire & Humber, only four local authorities had house prices exceeding eight times average earnings.

The North East had more local authorities with affordability ratios below five than above, making it the most affordable region overall.

London, where eight out of 10 local authorities had ratios over 12, was the least affordable.


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