Rental yields - London and SE fail to break into top 25 postcodes

A survey has been undertaken of the top 25 UK postcodes in terms of yields for investors - and London and the south east of England fail to make the cut.

The survey, by TotallyMoney, concludes that despite increasing pressure on diminishing margins, landlords could still see rental yields in excess of 12 per cent in the best postcode area, listed as Liverpool L7.

A combination of lower than national average house prices and relatively high rental costs driven by high demand have contributed to the 12.63 per cent yield. 

The survey looked at more than 500,000 properties in 2,700 postcodes across England, Scotland and Wales, and Merseyside picked up all three of the top positions.

In total, eight Liverpool postcodes appeared in the top 25 locations for yields.

Manchester, Nottingham, Sheffield, Glasgow, Cardiff and Plymouth, all university strongholds with large student bodies in need of affordable accommodation, also placed highly in the top 25 postcodes and delivered buy-to-let yields in excess of 7.25 per cent.

Middlesborough’s TS1 postcode is home to Teeside University and makes the top five with an average yield of 10.06 per cent and an average property asking price of only £64,500.

No postcodes from London or the Home Counties make the top 25 BTL yielding postcodes - but central London postcodes make up eight out of 25 of the bottom BTL yielding areas.