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Southampton is Top Buy-to-Let Location in UK

By +Eric Jafari

Southampton Is Top Buy -to -Let LocationSouthampton is the place to be for buy-to-let landlords, according to new research from HSBC. Out of 50 towns and cities with the highest concentration of private rental housing, Southampton topped the list, enjoying rental yields of 7.82 per cent. What's more, private rental accommodation makes up a quarter of its housing stock and prices remain affordable.

Average rents stand at £901 per month in Southampton, considerably higher than most cities in England and Wales. However, it isn't the only place in England and Wales where conditions are favourable for buy-to-let landlords. Blackpool, Hull, Manchester and Nottingham are also prime spots for investment, thanks to their relatively inexpensive property prices. These areas boast rental yields of 7.81 per cent, 7.77 per cent, 7.60 per cent and 7.55 per cent respectively. Coventry also performed relatively well, coming in at sixth place with a yield of 7.13 per cent.

Surprisingly, London did not perform well, despite rented accommodation being in high demand. According to HSBC, this is because of the comparison between rental yields and property prices. Values keep rising in the capital, pricing many out of the market. However, Southwark performed relatively well, coming in 13th place overall. Nevertheless, the boroughs of Hammersmith and Fulham and Kensington and Chelsea ranked in the bottom two places. This is thanks to high initial outlay prices, generating returns of just 3.42 per cent and 3.34 per cent respectively.

Peter Dockar, head of mortgages at HSBC, commented: "Buy to let remains a good investment for those looking for above average returns. Twenty-three of the top 50 areas offer yields above five per cent, significantly more than is available from more traditional savings options. However, it is clear there is a fine line between a property in a desirable area, the rents that can be achieved and the returns that can be yielded so it is key landlords do their research as often the most popular locations may not offer the best return."

22 April 2013

Tags

Buy to Let,HSBC,Rental Property Market,Rental Statistics