The best places in the UK to be a landlord
The decision to become a landlord involves many factors – but how many landlords consider exactly where the best areas are in order to have the best chance of succeeding?
With renting becoming increasingly vogue, this is good news for landlords all over the country. You may want to take in certain geographical factors, however, into your decision-making.
You may have pinpointed somewhere near to a university, perhaps, or based the decision on your own tastes of where you want to live – however, before sorting out your buy-to-let mortgage and landlord insurance, location could be an important thing for you to consider.
According to a recent postcode survey, picking a location that people may not necessarily have chosen to live in if they didn’t have to, can lead to higher profits for landlords. For instance, many people live in London due to work rather than choice.
The survey listed Blackpool as having the best opportunity for landlords – with low property values and high rent the average gross annual yield is 5.35%. Other top contenders include: Wigan, Romford, Uxbridge, Cleveland and Luton.
The study concluded that other factors influencing high gross yield were areas with low housing costs, a changing population, and places with large ethnic populations, where demand to rent is high.
Another influencing factor is the balance between demand and supply. A similar survey found that London has the biggest demand for rental properties in the UK, followed by Luton, Cambridge, Milton Keynes and Portsmouth. In these areas, rooms up for rent are snapped up within a matter of hours after being advertised, according to the study.
In areas where supply is low and demand is high, this is good news for rental rates, with potential tenants being more lenient on price. Especially in London – soaring house prices means that demand for rental properties will probably always be high.
One study has investigated which type of tenant provides the highest earnings, which will also be affected by which area you decide on. The study says that students provide the highest yield, followed by young singles and the retired. Therefore, depending on the type of tenants you’re looking for – choosing a university town, a well-off area or an area of retirement could also affect your profits.
Deciding to become a landlord is a complex decision and isn’t the fastest or easiest route to money. Despite the risk, however, it can be both rewarding and profitable. Deciding where to rent property may impact your long term success – so think about what type of tenants you want to attract and select somewhere where demand sits higher than supply. Lastly, ensure you know your way around a washing machine and you’ll have guaranteed plain-sailing.
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