The latest Rightmove Rental Trends Tracker has revealed that towns in the East of England are increasingly becoming the UK's highest performing investment locations outside the capital. Annual rental growth in the East of England stands at 6.4%, more than double the rate recorded in Greater London.
Rightmove’s new total returns calculator uses the largest rental property data set across England and Wales, taking into account the area’s annual price growth and the average rent a landlord would collect in that time. It then identifies the locations where buy-to-let investors have seen the highest overall return on their investment.
From these calculations, the location where investors benefited from the best returns is Halstead. This top-ranked town in the Braintree district of Essex is a popular investment location, attracting those looking for a villagey lifestyle while remaining within commutable distance to London.
Halstead was closely followed by Hertfordshire town Borehamwood, with Essex’s Brentwood not far behind in third place, demonstrating the East of England's new found domination for profitable investment locations.
“Investors and tenants who’ve been priced out of London and the South East have looked for better value areas in the East, and it seems they’ve both found a winning formula,” comments Sam Mitchell, Head of Lettings at Rightmove.
Brentwood in particular has experienced strong tenant demand in recent years, due its proximity to the capital’s amenities – it’s only a 20 minute commute into London. This high demand has pushed up rents charged by landlords, again increasing the level of investment returns.
“Those landlords who bought in the East of England are seeing much higher returns on investment as the region leads the way for rental growth. But with a combination of such high returns for buy-to-let landlords and affordable prices for first-time buyers, demand for property is high,” Mitchell adds.
However, it’s not only eastern locations which are deemed property investment hotspots by the study. In this nationwide report, Cottingham also made the top ten. This Yorkshire town was the only Northern location to make an appearance in the top ten investment locations, although Ashton-Under-Lyne in Manchester moved up into the top five most in-demand areas for tenants.
Greater London certainly didn’t feature in the top ten investment locations, as it seems the affordability ceiling here has finally been reached. Rents only increased 0.2% in the last quarter in Greater London; however this could also be caused by a slight increase in the amount of available properties in the area.
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