Could Stoke-on-Trent be the UK’s next BTL sweet spot?

Could Stoke-on-Trent be the UK’s next BTL sweet spot?

According to new research from Property Partner, the Staffordshire town famous for its pottery is where landlords can find the best combination of affordability and rental return, making their investment more efficient than anywhere else in the country.

Stoke-on-Trent was followed by Oldham in second place and Liverpool in third. The research also reveals a striking North-South divide in the tables.
 
The ten most efficient areas to become a landlord in Britain are in the North while every one of the least efficient buy-to-let locations are in the South.
 
Property Partner’s study ranked Britain’s 100 major towns and cities, taking into account the average income, average property price and average rent in each area.
 
Investors can enter the buy-to-let market more easily if their income is relatively high compared to local property prices, and will earn a stronger rate of income return if those properties command high levels of rent relative to their price.
 
The rest of the top ten was made up of Leeds, Middlesbrough, Newcastle, Stockton-on-Tees, Gateshead, Rotherham and Rochdale.


The data revealed that the South dominates the bottom of the rankings thanks to high demand pushing up prices, resulting in high capital requirements to enter the market and weaker rental yields.
 
Potential landlords in Poole face the most challenging investment in buy-to-let followed by Central London, and then Sevenoaks.  Fourth from bottom came Bournemouth, followed by Cambridge, Oxford, Winchester, St Albans, Chelmsford and Brighton.
 
For income seeking buy-to-let investors, the research reveals a telling correlation between low rental yield and investment inefficiency.
 
Leeds had the highest yield of all 100 towns and cities (6.92%) and came in fourth overall. Four other places featured in both the top ten yielding towns/cities and the ten best places to become a landlord overall. They were Gateshead (yielding 5.78%), Stoke-on-Trent (5.67%), Rochdale (5.6%) and Newcastle (5.59%).
 
The same pattern exists at the other end of the table. Six of the most challenging areas to profit from buy-to-let are also among the ten lowest yielding areas. They are Poole (1.94%), Sevenoaks (2.48%), Cambridge (2.51%), Chelmsford (2.53%), St Albans (2.55%) and Bournemouth (2.68%), all markets with high demand from owner occupiers prepared to pay premium prices for a popular location.
 
An investor would need a deposit of £29,397 to secure the average buy-to-let purchase in top performer Stoke-on-Trent on a Loan-To-Value (LTV) of 75%. Average property prices there have reached just £117,586.
 
Dan Gandesha, founder of property investment marketplace Property Partner, said: “What our research reveals is a clear North-South divide in the investment opportunities facing buy-to-let landlords.
 
We have always been at pains to point out to investors that prime locations such as Kensington and Chelsea can offer some of the lowest yields available, because prices have raced ahead while rents have failed to keep pace. It just goes to show, you shouldn’t always follow the crowd and the right investment could be on your doorstep where there is far less overall demand.”

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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