Savills research reveals top ten BTL cities

Savills research reveals top ten BTL cities

For many years, London has been the darling of the property investment market, providing high yields and booming tenant demand. However, with sky high property prices in the capital, investors are looking further afield for the opportunities.

New research from Savills has analysed the key drivers for the rental market and identified the top cities for buy-to-let investment.  The top three positions go to Manchester, Reading and Bristol, because of their strong economic growth factors and reputation as vibrant, desirable places to live.

Though this is not an exhaustive list, Savills has highlighted investment prospects in cities set to experience a significant housing shortfall, such as Oxford.  The research examined the economic prospects of each city, which included analysis of historic and future growth sectors.

The research also looked at the investment potential of each city, by taking into account the net income return, rental growth prospects and capital value growth; housing supply and demand in each city, including objectively assessed need, household projections, population growth forecasts and dwelling completions; and how the rental market has evolved and grown in
these cities.

Top Ten Cities for Investment

•  Manchester
•  Reading
•  Edinburgh
•  Bristol
•  Brighton
•  Leeds
•  Glasgow
•  Cardiff
•  York
•  Milton Keynes
•  Salford
•  Birmingham
•  Oxford

Peter Armistead of Armistead Property comments: “House prices in London are about five times what they are in Manchester, but salaries are only 30% higher.  Manchester is a very affordable place to live and demand for property is soaring in the city, thanks to the expansion of the MetroLink tram system, the trendy Northern Quarter and the BBC Media City.
Manchester has vibrant restaurants, bars, clubs plus a great music scene, galleries and museums. It also has an amazing student community and its universities, teaching and research facilities are truly world class.  It is home to nearly 100,000 students, making it one of the largest student cities in Europe. Despite all of its many advantages and attractions, Manchester is a very affordable place to live and many students chose to carry on living there after they graduate, as well as graduates from other areas moving to Manchester. Furthermore, wages relative to property costs are a very important factor in attracting these people.

Manchester is a great place for BTL investment. An average residential property in Manchester is just £155,000, while a flat in a good area, costs as little as £120,000.  A property in the city can provide a 5% minimum cash rental yield and a typical 12% total cash yield, including 7% capital appreciation.  Demand for rental accommodation is strong and by comparison with other regions, housing is cheaper.  
It’s not surprising that investors are turning away from London to more fruitful, regional cities like Manchester.  If investors can purchase cheaper properties with better yields, they will have the opportunity to protect and boost their profits in the longer term.”

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daniel black
daniel black 25 Oct 2016

I've been keeping a close eye on what the effect of Brexit has been on the rental market and it's a very mixed bag. Whilst the majority of the news focuses on London's market. I think this time next year...

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Northerner 20 Oct 2016

Any views from outside the M25? No wonder politicians can't get the housing big picture when everyone seems to think that London is the yard stick, when it absolutely is not.

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Sean Lees
Sean Lees 13 Oct 2016

I think that the pest control really depends on the situation. If the tenant moved in and found an infestation that needs pest treatment service, I think it's more reasonable that the landlord should pay...

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Kevin 13 Oct 2016

Please Sian Berry Dan Wilson Craw LANDLORDS DO NOT WANT TO RAISE RENTS They are being forced to because of Section 24! An unfair, punitive tax hike that will be a disaster Green Party, Generstion...

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Fletcher88 11 Oct 2016

Absolutely agree! Moreover property prices edged up with 0.7% this month as the market recovered from the initial Brexit hit

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Gary Das
Gary Das 06 Oct 2016

A lot of lenders (especially the high-street banks and lenders people approach first) could do more to accommodate for the self-employed. It can really be a struggle, as I found out myself last year when...

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richardrawlings 04 Oct 2016

Not sure I understand this! If Basildon and Hemel rose 68% and 52% respectively, why do they not appear in the top ten list, which appears only to feature those in the minus 20's!! Is it me?

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luxus 27 Sep 2016

It can be stressful. More clarity is needed on the process, from a customer perspective and consideration should be given to using the Scandinavian model where the sales process is much quicker.

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Melissa_Green 26 Sep 2016

Green belts are normally designated around capitals and other major cities and conurbations and their aim is to prevent urban sprawl by keeping land permanently open. The essential characteristics of green...

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Jimmy_McCoy 16 Sep 2016

I think that the main reason to buy garden purchases in last minute is because people always search for the best deal. In summer months there are abundance of seasonal goods and it means more low cost

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Jimmy_McCoy 16 Sep 2016

Buying a home often is more expensive than you expect. There are lots of hidden costs such as: stamp duty, surveys and valuations, mortgages etc. that can add more than 10% to the total bill

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Homebuyerconveyancing 15 Sep 2016

We are seeing a massive influx of Homebuyers using online Estate Agents. The winners are the online portals that still aim to manage the customer journey to homeownership. They provide a valuation service,...

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