Top buy to let hotspots revealed

There are 129 locations where rent prices have climbed while house prices stagnated or declined, creating exceptional property investment opportunities, research reveals.

These emerging hotspots are scattered across the country, with notable examples including Brent, Hammersmith and Fulham, and Westminster in London.

There are also good performance levels in Salford and Burnley in the North West, and Ipswich and Hertsmere in the East of England, the findings from Lomond highlight.

House prices standing strong

John Ennis, Lomond’s chief revenue officer, said: “Generally speaking, the property market has held its own over the last year with house prices standing strong despite the turbulence caused by higher mortgage rates.

“Now we have seen the Bank of England reduce rates we are seeing significant optimism coming back in from both buyers and sellers.

“When breaking the market down, there are a multitude of areas that have seen minimal movement in house prices yet where rental values have performed very strongly indeed.”

Strong rental market performance

He added: “This increased level of housing market affordability coupled with a strong rental market performance has helped to significantly improve the yields available to buy to let investors and created opportunities in markets that they may not have previously considered.

“This demonstrates the importance of strategic investment for landlords when looking to create or expand their portfolio.”

Landlord profits are on the rise

The data from Lomond also shows that landlord profits are on the rise as rental yields climb.

Its analysis of government data shows average rents increased by 8.2% in the past year, eclipsing a 2.2% increase in house prices.

Consequently, the average rental yield has jumped from 4% to 4.2%.

Lucrative for buy to let investors

While every region experienced yield growth, some areas stand out as particularly lucrative for buy to let investors.

Lomond says that London, the South East, and North West saw the most significant yield improvements.

However, the North East boasts the highest overall yield at 4.9%.

Areas with the largest rental yield

Here are the areas with the largest rental yield growth of 0.4% or more across each region:

• East Midlands: Nottingham (+0.6%), Ashfield (+0.5%), Broxtowe (+0.4%) Derby (+0.4%) and Erewash (+0.4%)
• East of England: Ipswich (+0.8%), Hertsmere (+0.7%), Watford (+0.7%), Harlow (+0.6%) and Stevenage (+0.6%)
• London: Brent (+1.3%), Hammersmith and Fulham (+1.2%), Westminster (+1.2%), Tower Hamlets (+0.9%) and Haringey (+0.7%)
• North East: Hartlepool (+0.6%)
• North West: Salford (+0.8%), Burnley (+0.7%), Knowsley (+0.5%), Blackburn with Darwen (+0.5%) and Bury (+0.4%)
• South East: Reading (+0.8%), Folkestone and Hythe (+0.8%), Portsmouth (+0.7%), Epsom and Ewell (+0.7%) and Thanet (+0.6%)
• South West: Exeter (+0.4%), Swindon (+0.4%)
• Wales: Merthyr Tydfil (+1.4%), Denbighshire (+0.5%), Cardiff (+0.5%), Gwynedd (+0.4%) and Neath Port Talbot (+0.4%)
• West Midlands: Birmingham (+0.4%), Solihull (+0.5%)
• Yorkshire and the Humber: York (+0.5%).

The full list of areas can be found from Lomond.

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