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Strong returns in North West for BTL investors

Friday 13 January 2017



Shrewd BTL investors should look to the North West where strong returns are on offer, new figures from Rightmove suggest.
 
Bootle in Merseyside tops a new table with a current rental yield of 9.3 per cent, while Birkenhead follows at 7.5 per cent and Burnley, in Lancashire, offers 7.2 per cent.
 
Sam Mitchell, the property website's head of letting, said demand and yields were highest in certain areas of the North West and predicted asking rents could rise 4 per cent by the end of 2017 outside London.
 
All regions except the capital recorded an increase in asking rents in 2016, with average prices up annually by 3 per cent, just under the rise of 3.7 per cent recorded in 2015. 
 
Yorkshire and the Humber reported an increase of 4.5 per cent, while the North West saw prices rise by 4.4 per cent.
 
Swansea had the highest rental growth last year with an 11.4 per cent annual increase, followed by Gillingham in Kent where asking rents were up 11.1 per cent and Bath, which saw a 10.5 per cent increase to £1,148 per month. 
 
Bath also reported the highest annual growth for asking prices in 2016, up 17.8 per cent to £485,491.
 
Prices in London dropped by a 4.4 per cent, as more rental stock became available. Inner London rents fell by 5.2 per cent and by 2.5 per cent in outer London as tenants searched for homes in more affordable areas such as Rainham, Bexleyheath and Erith. 
 
Sam Mitchell warned that London landlords could find that tenants were becoming 'more price sensitive'. 
 
She said: "Setting realistic rent levels will be the key to avoiding void periods.” 
 
She predicted that 2017 would be one of ‘caution’ for BTL investors as tougher lending rules and increased stamp duty hit the rental sector.
 
New tax changes due to be phased in from April could cause a 'tightening of supply in some areas’ which she thinks may lead to increasing rents.
 
Rightmove think asking rents could rise by 4 per cent outside London by the end of 2017, while prices outside the capital were 'likely to stay flat.' 

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