Liverpool Named As Top Buy to Let Investment Location

Liverpool has been identified as the best place for a buy to let investment, according to research published by mortgage broker Private Finance. Their analysis revealed that landlords can expect a rental yield of 8% from properties in Liverpool once mortgage costs are factored in.

The main reasoning behind Liverpool topping the list is the combination of low average house prices and high rents. The average house price in the North-Western city sits at just £122,283, well below the overall national average. Residential rents on Merseyside are strong though, with the average rent cost coming in at £1,021 per month.

Location Crucial for Immediate Buy to Let Returns

The Director of Private Finance, Shaun Church, explained why location is so important when deciding on a buy to let investment. He said, “Succeeding in making a long term profit depends on buying an affordable property and being confident its value will appreciate at a higher rate than mortgage borrowing. However, for more immediate returns, landlords can optimise rental yields by choosing their buy to let location carefully. Investors should look for areas with strong rental demand.”

Mr Church continued, “Larger cities and university towns generally have better performing rental markets. This will help to avoid lengthy void periods that can damage landlords’ profitability. They may also want to stay away from areas with very high house prices. Although these locations can provide high rental income, a large initial investment can prevent investors from achieving good returns.”

Other locations identified as good for buy to let investments include Nottingham and Coventry, which have potential rental yields of 5.6% and 5.4% respectively. Greater Manchester has a potential rental yield of 4.3%, with Portsmouth close behind on 4.2%.

Landlords Benefitting From ‘Ultra Low Mortgage Rates’

Mr Church added, “When purchasing with a mortgage, landlords should keep in mind that the larger the loan, the higher their mortgage costs will be. Now that tax relief on mortgage interest is being restricted, keeping mortgage costs down is particularly important. The good news is all landlords are benefitting from ultra-low mortgage rates. An independent mortgage broker has access to products that might not be available if going it alone, and can help track down the most affordable and suitable option.”

Despite the rather obvious plug for his firm’s business ventures, Mr Church and Private Finance are providing very interesting information for potential buy to let investors who haven’t yet taken the plunge with a property purchase. There’s a lot more to consider, of course, but calculating the potential rental yield in advance of a purchase is the ideal place to start.

You can find out more information about buying your next home from our team of property experts! Get in touch with us today https://www.nswproperties.co.uk/contact.html