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Coastal towns and Northern cities now buy-to-let hotspots as landlords cash in on high yields,,,

Inexpensive property prices coupled with strong rental demand have made seaside towns and areas of the North such as Blackpool, Hull, Manchester and Nottingham the most lucrative hunting grounds for buy-to-let landlords, research has revealed.

Southampton tops the list of locations with the highest average rental, at 7.82 per cent per year. Landlords seem to have cottoned on to the high returns as rental accommodation makes up almost a quarter of the housing in the City, according to the data from high street bank HSBC.

The average Southampton property costs £138,311, while the average rent is a meaty £901 a month.

Buy-to-let winner: The seaside town of Blackpool is one of the top places to invest in a rental property, according to data

But making up the rest of the top five are northern areas. Blackpool for instance has an average property price of £75,943 and rents of £494, giving it a rental yield just behind Southampton of 7.81 per cent.

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Hull, Manchester and Nottingham have rental yields of 7.77, 7.6 and 7.55 per cent respectively.

Blackpool, Bournemouth and Brighton top seaside towns

Due to holiday rentals and seasonal work, many seaside towns are buy-to-let hotspots according to HSBC with 17 of the top 50 areas found on the coast.

Blackpool easily tops the list of seaside towns for top rental yields.

The rest of the top ten is made up of southern seaside areas, including holiday destinations such as Brighton, Bournemouth and Southend-on-Sea.

While property prices tend to be higher in these areas, rents are also above average, meaning yields are strong for investors.

High house prices mean low yields in London

The study, by HSBC, of the fifty towns and cities with the highest concentration of private rental housing stock found that despite rising rents in London, the capital doesn’t score highly in terms of rental yields due to the comparably high property prices

Southwark tops the list of London boroughs with a yield of 6.15 per cent. Areas in outer London offer some of the strongest yields in the capital including Newham, Enfield, Brent and Kingston upon Thames.

Just three of the top ten areas are in inner London and each of these is in the East of the city, traditionally the more affordable end of the capital.

According to the latest buy-to-let index from LSL Property Services rents in London have hit a fresh record.

London posted a 1.3 per cent rise in the last month, taking rents in the capital to a record high, averaging £1,106 per month.  In February 2013, the average London rent stood at £1,092.

Of all regions of England & Wales, London experienced by far the fastest annual increase in rents, leaving rents in the capital 7.9 per cent (£81) more expensive than a year ago. In March 2012 the average rent in the capital was £1,025.

Recent Office for National Statistics (ONS) data found that the average house price in London went up almost six per cent in the last 12 months. 

Peter Dockar, head of mortgages at HSBC, said: ‘Buy-to-let remains a good investment for those looking for above average returns. Twenty-three of the top 50 areas offer yields above five per cent significantly more than is available from more traditional savings options.

‘However, it is clear there is a fine line between a property in a desirable area, the rents that can be achieved and the returns that can be yielded so it is key landlords do their research as often the most popular locations may not offer the best return.’




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