Are you looking to start investing in rental properties? Or an existing landlord seeking your next investment opportunity? If so it makes a lot of sense to research the best areas for renting to ensure that you maximise the payback on your investment. Rightmove have carried out a survey of the popular places to live in 2019 and here we will look at that in a little more detail.
There are two aspect to consider when looking for the best places to buy an investment property: How popular is the location and how much are rent prices increasing?
In terms of popularity, the most commonly searched areas in London for a rental property were: Canary Wharf, Fulham, Wimbledon, Richmond, Clapham, Stratford, Islington, Putney, Notting Hill and then finally Kingston-Upon-Thames. If you want to invest in areas where there is likely to be a low chance of the property being vacant because the demand is large, then these areas are your best bet given that these are the most searched for areas to rent in London.
The list changes significantly, however, if you are looking to maximise your return with rent growth. In this case, you will need to carefully consider your mortgage payment against the rental income but as a guide the areas in London seeing the largest Rental price increases are: Battersea with a 14.1% increase in 2019 compared to 2018 and an average rental price of £2,544, Golders Green (12.2%, £2,283), Elephant and Castle (10.3%, £2,060 ), Hammersmith (10.2%, £3,122), Southwark (10%, £2,693), Greenford (9.4%, £1,456), Muswell Hill (8.5%, £1,685), Holloway (8.5%, £1,894), Shepherds Bush (8.3%, £1,937) and finally Knightsbridge (7.6%, £5,437). As you can see there is good rental price growth in London with some areas into double figures in terms of rental price increases in 2019 versus 2018.
If you don’t fancy investing in London for whatever reason, then you will want to know all about the most popular areas in the rest of the country. The most popular city for rental searches in 2019 was Bristol, which according to RightMove was also the most popular place for sales searches. The rest of the top 10 were: Manchester, Liverpool, Cambridge, Glasgow, Leeds, Nottingham, Birmingham, Edinburgh and then Sheffield.
As was the case in London, the top 10 places where rental income grew most is very different to the most popular places. Ashton-under-Lyne saw the largest increase in prices compared to 2018 with average rental prices increasing 5.4% to £546 per month. Making up the top 10 were: Durham (5.2%, £565) Newcastle Upon Tyne (5.1%, £661) and Bury (5.1%, £610) in joint 3rd, Salford (5.0%, £882) & Ilkeston (5.0%, £523), Staines (4.9% £1,266), Stirling (4.8%, £684), Manchester (4.7%, £855) and finally Lytham St. Annes (4.7%, £602). It is interesting to note that 8 out of the top 10 are places in the North, with only one in the South East and one in the East Midlands.
Clearly past performance does not guarantee future performance so make sure to do your research properly before investing in a rental property. Having close ties with a local property agent can also help, Belvoir have 165 offices located throughout the UK all with local property knowledge that can invaluable to new and existing landlords!