Coast, country or city – which makes the best buy-to-let location?

March 30, 2020
Countryside

The latest research by leading lettings management platform, Howsy, has looked at which makes the best investment location for UK landlords when it comes to cities, the seaside or market towns in the country.

Howsy looked at 20 of the best UK cities, seaside towns and market towns to see which offered the best rental yields overall as a category and which were the most lucrative specific investment locations in each category.

Coast vs Country vs City – Overall Returns

With the current average UK rental yield returning 3.56% all three rental locations offer above-average yields. Investing in a city generally returns the highest yield with the top 20 seeing an average return of 5.00%. The countryside is home to the second-best investment option with the top 20 market towns returning an average yield of 3.72%, while the top 20 seaside towns were home to an average yield of 3.59%.

Best City Rental Yield Returns

When it comes to the best rental yields within these major cities, all of them offer an average yield above the UK average.

Glasgow is home to the highest at 7.93% while Belfast is also home to an average rental yield way above the UK average at 6.55%. Nottingham (5.46%), Manchester (5.45%) and Sunderland (5.33%) also rank in the top five.

Best Market Town Rental Yield Returns

Fancy investing in a slower pace of life? Bangor is the market town with the highest rental yields on offer at 4.86%.

Dumfries isn’t far behind with the average rental yield at 4.59% while Morpeth and Alnwick are also home to an average yield of 4.25%. Nantwich completes the top five market towns with the highest rental yields at 4.12%.

Best Seaside Location Rental Yield Returns

Prefer to invest by the sea? Seaside locations aren’t home to yields as strong as the previous two investment options but Brighton is home to the best of the bunch with the average at 4.27%. Tynemouth also ranks high at 4.24%, followed by Bournemouth (4.15%), Crosby (4.08%) and Torquay (3.84%).

Founder and CEO of Howsy, Calum Brannan, commented: 

“Cities are typically the preferred place for a buy-to-let landlord when it comes to investing, largely due to the higher level of rental income and the consistent demand for rental homes. So it comes as no surprise that they are home to the highest yields overall.

That said, the coast and country can also prove to be very lucrative and as the figures show, there are plenty of options across both that offer yields way above the national average.

The great thing about the buy-to-let market is investments aren’t restricted to one or the other and the professional landlord can opt to spread his property portfolio across city, seaside and country if they so wish.

While traditionally geographical distance may have made this tricky the technological disruption of the buy-to-let sector has changed the way we invest and manage in bricks and mortar. With online and hybrid platforms allowing easy management from your front room, there’s no reason why you can’t invest the length and breadth of the UK.

With products such as Howsy Protect, you can also do so knowing your rent is guaranteed and any damages are not only covered but rectified without you even leaving the house.”

Rental Yields Across Each Rental Type Category
Location
Average House Price 2019
Average Monthly Rent 2019
Rental yield
City
£184,228
£750
5.00%
Countryside (Market Towns)
£238,388
£717
3.72%
Seaside
£238,086
£709
3.59%
Top 20 Cities ranked by best rental yield available
Location
Average House Price 2019
Average Monthly Rent 2019
Rental yield
Glasgow
£133,614
£883
7.93%
Belfast
£131,084
£716
6.55%
Nottingham
£144,284
£657
5.46%
Manchester
£181,071
£822
5.45%
Sunderland
£116,315
£517
5.33%
Newcastle
£159,632
£674
5.07%
Leeds
£185,628
£774
5.00%
Bradford
£136,947
£559
4.90%
Edinburgh
£265,679
£1,084
4.90%
Bristol
£280,437
£1,140
4.88%
Liverpool
£133,973
£532
4.77%
Doncaster
£128,851
£503
4.68%
Birmingham
£188,590
£724
4.61%
Wigan
£134,927
£514
4.57%
Sheffield
£167,003
£629
4.52%
Wakefield
£150,247
£548
4.38%
London
£472,524
£1,697
4.31%
Leicester
£175,233
£629
4.31%
Coventry
£188,280
£657
4.19%
Cardiff
£210,250
£733
4.18%
Top 20 Market Towns ranked by best rental yield available
Location
Average House Price 2019
Average Monthly Rent 2019
Rental yield
Bangor
£154,718
£627
4.86%
Dumfries
£128,048
£490
4.59%
Morpeth
£152,305
£539
4.25%
Alnwick
£152,305
£539
4.25%
Nantwich
£228,157
£784
4.12%
Keswick
£151,493
£517
4.10%
Denbigh
£155,915
£518
3.98%
Stamford
£216,197
£671
3.72%
Lewes
£326,957
£998
3.66%
Bury St Edmunds
£244,921
£739
3.62%
Harrogate
£284,710
£853
3.60%
Knaresborough
£284,710
£853
3.60%
Wilton
£273,729
£807
3.54%
Ludlow
£214,801
£628
3.51%
Cranbrook
£383,413
£1,083
3.39%
Wareham
£294,595
£824
3.36%
Chagford
£256,849
£679
3.17%
Market Harborough
£293,603
£765
3.13%
Tetbury
£383,645
£956
2.99%
Builth Wells
£186,686
£462
2.97%
Top 20 Seaside Locations ranked by best rental yield available
Location
Average House Price 2019
Average Monthly Rent 2019
Rental yield
Brighton
£364,493
£1,298
4.27%
Tynemouth
£161,642
£571
4.24%
Bournemouth
£250,669
£867
4.15%
Crosby
£167,542
£570
4.08%
Torquay
£197,794
£633
3.84%
Whitby
£165,215
£517
3.76%
Hastings
£214,199
£659
3.69%
St Ives
£233,998
£717
3.68%
Porthmadog
£159,634
£488
3.67%
Southend
£312,081
£941
3.62%
Margate
£236,991
£701
3.55%
Whitstable
£301,136
£876
3.49%
Worthing
£315,665
£908
3.45%
Skegness
£179,689
£513
3.43%
Weymouth
£294,595
£824
3.36%
Aberystwyth
£185,083
£507
3.29%
Tenby
£176,298
£471
3.20%
Woolacombe
£247,590
£637
3.09%
Salcomb
£308,231
£776
3.02%
Southwold
£289,177
£713
2.96%

 

Sources:
Average house price
UK
Average private rents
England
Wales
Scotland
Northern Ireland

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