Rental yields increase in areas with higher crime rates
Rental yields tend to increase in areas with higher crime rates, according to new research by the national lettings platform, Howsy.
The study looked at how crime rates impact rental yields and found that the average return actually increases as the level of crime does.
Howsy analysed government data on population figures by local authority, the level of crime in these areas, the average house price, rental costs, and the resulting rental yields to see how crime and buy-to-let profitability correlates.
In the lowest threshold, between 0 and 40 crimes per thousand people where there is an average of 34 crimes per thousand of the population, the average rental yield sits at 3.58 per cent.
Between the threshold of 60-80 crimes per thousand people, this increases to 3.77 per cent and in the highest category of 100 or more crimes per thousand people with an average of 123 crimes committed per thousand people, rental yields are at their highest – at an average of 4.38 per cent.
The research also looked at where in the UK offers the best buy-to-let investment, with the highest return and the lowest propensity for crime.
In the lowest crime category of 0-40, Merthyr Tydfil is home to the highest yields. With an average house price of £102,713 and an average monthly rent of £472, landlords can expect yields of 5.52 per cent with the lowest chance of crime impacting their investment.
Staying in Wales, Rhondda Cynon Taff is the second safest investment with yields of 4.50 per cent. North East Derbyshire ranks third (3.84 per cent), followed by North Kesteven (3.75 per cent), West Oxfordshire (3.67 per cent), Wealden (3.64 per cent), East Cambridgeshire (3.60 per cent), Rutland (3.52 per cent), Broadland (3.32 per cent) and South Norfolk (3.30 per cent).
Calum Brannan, founder and CEO of Howsy, said: “When looking to invest, it’s smart to consider the additional factors that can impact your property and not just the top line return.”