Thursday, January 24, 2013

Avoid London for buy-to-let returns


PropertyGuru.com.sg
Jan 24, 2013

Areas of London have been highlighted as some of the worst performing buy-to-let locations in the UK, according to new research published today.

A report from Home.co.uk, a leading property search engine, identified the best and worst locations in terms of typical gross rental returns on invested capital. Rental yields were then calculated by comparing the asking prices and market rents for a two-bedroom property.

Top of the list, with a yield of 8.8 percent, is the town of Bootle (pictured), located just north of the city of Liverpool in the north west of England.

The worst letting locations in terms of gross rental yield, according to the report, are dominated by the most expensive parts of London. Areas including Charing Cross, The Strand, Soho, Knightsbridge, South Kensington, Bloomsbury, Chelsea, Holborn, and Mayfair and Belgravia were spotlighted, with typical rental yields between 2.4 percent and 3.3 percent. Yields in these locations have fallen by around 33 percent over the last two years, the report noted.

Doug Shephard, Director at Home.co.uk, said: “Investors in the rental property market really need to research their chosen location carefully in order to maximise potential yields. These top gross rental yield locations are highly attractive to buy-to-let investors, however many other locations are not."

The report looked at 297 towns and cities in the UK with more than 100 two-bedroom properties for sale and rent.


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