Best UK rental yield hotspots for 2022
2021 was a record year for house price and rental yield growth. This growth is set to continue in 2022 as recovery from the pandemic continues. In this blog, we take a closer look at the top city locations tipped for high rental yield this year.
With 34% of landlords planning to buy at least one more property in the next year, choosing the right location is key for greater returns. Data from Zoopla shows the private rented sector is forecast to rise by 4.5% nationally in 2022 with increased demand for city centre living following recovery from the pandemic.
Analysis by property investment company, Track Capital, highlights student cities Nottingham, Manchester and Newcastle as the top places to invest for the best rental yield in 2022:
| Position | Postcode | Area | Avg asking price | Avg asking rent (pm) | Avg yield |
|---|---|---|---|---|---|
| 1 | NG7 | Nottingham | 170,278 | 1,598 | 11.30% |
| 2 | NG1 | Nottingham | 159,083 | 1,473 | 11.10% |
| 3 | BD1 | Bradford | 54,526 | 483 | 10.60% |
| 4 | M14 | Manchester | 205,102 | 1,721 | 10.10% |
| 5 | NE6 | Newcastle Upon Tyne | 134,641 | 1,104 | 9.80% |
Source: Track Capital
Nottingham
Large student population from two universities: University of Nottingham and Nottingham Trent
Home to the largest teaching hospital in the UK, the Queen’s Medical Centre
HQ to major companies, including Boots, EON and Experian
Tram network with lines north and south of the city
Manchester
One of the largest university cities in the UK with 5 universities
The largest economic area outside of London
Fast growing centre for tech and media sectors (BBC MediaCity in Salford Quays)
Property prices up to 40% cheaper than in London
Newcastle
Large student population from two universities
Designated UK Science City
Emerging hub for creative and tech sectors
Offshore & Marine Enterprise Zone
House prices in the North East are 47% less than the UK average
Wherever your next investment property may be, here are our three essential things to consider:
Does the opportunity fit with your investment strategy?
Does adding a student let or HMO to your portfolio fit with your long-term goals? Though student lets in the cities mentioned above may offer the highest yields, consider if they are a good fit for your preferred investment style.
Have you done your research and forecast expected returns?
Thinking of investing in one of the top cities mentioned? Ensure you undertake further research into specific areas that align with your strategy. Use our free buy-to-let calculator to forecast projected rental yields and capital growth. Why not call a few local lettings agents to check if the areas you are considering align with tenant demand and your projected yields.
Are there any tax implications and do you need specialist advice?
Switching strategy or changed your short or long-term goals? It may be worth getting tax advice to understand the tax implications and identify opportunities for tax savings. For instance, if you’re planning on buying multiple properties in the same transaction (i.e. a block of 4 flats) you could be eligible for Multiple Dwellings Relief.
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