High yields for property in the north of England

Buy-to-let investors are seeing high yields in the north of England, according to a financial expert.

Speaking on the popular FT Money Show podcast, produced by the Financial Times, Tanya Powley explained that some towns and areas in this part of the country are seeing very healthy returns on investment.

As an example of this, the financial journalist pointed to the fact that property in Burnley was seeing yields of 7.6 per cent.

This represents a significant return on private wealth for investors: on a property with a value of £200,000, for example, a rental yield of 7.6 per cent would be equivalent to a net income of £15,200 a year.

"A lot of the higher buy-to-let yields tend to come in the north of England where obviously there are lower house prices," said Ms Powley.

"But on average what you are typically finding is that London is about 5.1 per cent, south-west is 3.8 per cent, and in other areas like Wales it is around 4.4 per cent"

When calculating rental yields, investors should factor in any costs, such as if they have to provide some of their own money towards the purchase of the property.

Currently, the best available mortgages offer a loan-to-value of 80 per cent, meaning that landlords will need to provide 20 per cent of the capital to make a purchase.

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