Two of city’s postcodes offer best returns in UK says report

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A leading property investment firm has named the top-performing postcodes and regions of the UK.

Track Capital, which is based in London but works with property investor clients all over the UK, has crunched the numbers for 1,350 postcode districts across the nation and says Nottingham currently offers the best return on investment for buy-to-let landlords.

Its December data snapshot shows that two postcodes within the Midlands city offered just over 11% gross yield – NG7 and NG1 – followed by the BD1 postcode in Bradford (10.6%), M14 in Manchester (10.10%), NE6 in Newcastle upon Tyne (9.8%), YO10 in York (9.8%), SA1 in Swansea (9.2%), CF37 in Cardiff (9.2%), SO17 in Southampton (9.2%) and YO31 also in York (9.10%).

This hotspot Top Ten compares favourably with the average gross yield per property in the UK, which currently stands at 3.63%, says Track Capital.

Looking through the list, the message from the data is clear – cities where rents are relatively high but prices still low are where the gross yields are to be found – so often areas where young professionals and students want to live.

“Student-dense cities such as Manchester, Leeds and Nottingham feature highly and are responsible for much of the high yields in those cities,” says Nick Hyland, founder of Track Capital (pictured).

“London can still achieve above-average yields, especially a little further out in the commuter belt, such as 5.2% in Dartford but it also has the lowest-performing areas in the country.”

But the research also suggests where not to invest. The worst places for yield in the UK are GU10 in Guildford (1.9%), HP9 in Hemel Hempstead (2%), IG4 in Ilford (2%), WD7 in Watford (2.1%), CM4 in Chelmsford (2.2%), B93 in Brum (2.2%), AL4 in St Albans (2.2%), KT13 in Kingston (2.3%), W1 in central London (2.3%) and also SL9 in Slough (2.4%).

Read more about Nottingham landlords.

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Stop demonising PRS landlords, says leading property sector figure

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Demonising the PRS will only exacerbate Scotland’s housing problems, according to one of the country’s biggest estate agents, who wants less rhetoric from legislators in 2022.

David Alexander, the chief executive officer of DJ Alexander Scotland, believes that a typically antagonistic approach undermines the service provided by the PRS and its essential role in housing hundreds of thousands of people.

He says legislators need to be wary of playing to the gallery in producing the simplistic argument that private renting is bad while social housing is good, and says the fact that it has grown significantly over the last 20 years reflects tenants voting with their feet.

“Both parts of the rented sector, along with owner-occupiers, serve the different needs of the population, and you interfere with these systems at your peril,” he adds.

Rental overhaul

Last month, Scotland launched plans for an overhaul of its rented sector that include a controversial system of rent controls, increasing penalties for illegal evictions, restricting evictions during winter, giving tenants greater flexibility to keep pets, introducing a new Housing Standard and PRS regulator and setting minimum standards for energy efficiency.

The proposals will shape a new Housing Bill in 2023.

“I believe that constructive dialogue, greater cooperation, and meaningful debate on how best to create the best private rented sector is the way forward rather than simple soundbites aimed at rallying the faithful while doing little to deliver on the housing needs of the population,” says Alexander. “Less rhetoric in 2022 and more communication is what is required.”

He adds: “Rent controls have never worked anywhere in the world and invariably lead to higher rents for new tenants and fewer properties on the market resulting in more housing shortages in the medium to long term.”

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