money

08 Nov 23

New research by digital mortgage lender Molo shows where in England and Wales offers the highest and lowest rental yields. 

The current average rental yield for England and Wales is 4.98 per cent but many areas outstrip that figure handsomely.

The top 10 places for high rental yield are all either in the North, Midlands or Wales. 

The study has revealed that the Central Valleys of Wales is one of the best locations across England and Wales for high rental yields at 7.96 per cent, which is almost double the national average. The average monthly rental income in the area is £697, which is relatively low compared with other areas, while  average property prices in the Central Valleys are within the 10 lowest in the country, at £100,786.

Following very closely behind as one of the best locations across England and Wales for high rental yields are Hartlepool and Stockon-on-Tees in the North East of England. Gross rental yields in the area are only slightly below the Central Valleys, at 7.90 per cent. While average monthly rental income is over £100 less than in the Central Valleys, at £592, and the average property values are also significantly lower, at £85,774.

The third best place for rental yield is another area in the North East, South Teesside, which sees a gross rental yield of 7.66 per cent. Swansea (gross yield of 7.30 per cent) and Coventry (gross yield of 7.06 per cent) round off the top five ranking places in the UK for rental yield. 

RankRegionLocationGross YieldAvg Monthly RentAvg Property Value
1WalesCentral Valleys7.96%£697£100,786
2North EastHartlepool and Stockton-on-Tees7.90%£592£85,774
3North EastSouth Teesside7.66%£646£96,500
4WalesSwansea7.30%£948£150,297
5West MidlandsCoventry7.06%£1,096£179,347

With a gross rental yield of 3.58 per cent, which is one third less than the national average, Camden and the City of London has been revealed as the lowest yielding rental location for buy-to-let property. While average monthly rental income is one of the highest on the list, at £2,268, the average property price is very expensive here too, at £672,104 – the sixth highest on the list. 

West Essex is another area that has a low rental yield, meaning it can be difficult to make a profit on a buy-to-let property, with a gross rental yield of 3.64 per cent.

Average monthly rental income is relatively high compared to the national average, at £1,800, but property prices are expensive in the area, at £548,000. 

Dorset (gross yield of 3.67 per cent), Bromley (3.69 per cent), and North Yorkshire (3.70 per cent) round off the top five lowest yielding areas in England and Wales. 

RankRegionLocationGross YieldAvg Monthly RentAvg Property Value
1LondonCamden and City of London3.58%£2,268£672,104
2East of EnglandWest Essex3.64%£1,800£548,000
3South WestDorset3.67%£850£270,000
4LondonBromley3.69%£1,606£483,636
5Yorkshire and the HumberNorth Yorkshire County Council3.70%£779£244,000

Link to original article

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