Buy-To-Let Hotspots In 2023

Published: 14/11/2023

Are you considering purchasing a buy-to-let property and becoming a landlord? One of the most important things you will want to know is where the most profitable areas are for rental yield. Well, according to data recently published by Zoopla, the North of England is considered one of the most popular and profitable regions when it comes to renting property.

What is buy-to-let

Buy-to-let is when you purchase a property specifically for the purpose of renting it out.

Just as the name suggests, if you are buying a property to rent out to tenants for a profit, you must get a buy-to-let (BTL) mortgage. Of course, a mortgage being when a bank or lender gives you money, which you must repay (in monthly installments usually over a period of several years), to purchase a property such as a city flat or house in the suburbs.

BTL mortgages, while offered by various banks and building societies, are traditionally more expensive than a standard residential mortgage, with less favourable fees and rates, because they are considered a higher risk. That’s not to say you cannot secure a great deal, but you should shop around first and perhaps enlist expert advice before locking anything in.

What is gross rental yield

Gross rental yield is the income you make on monthly basis with a buy-to-let property. However, this is before factoring in the expenses of owning a property. For instance, it doesn’t take into consideration the costs of keeping the property in running order each month, from maintenance costs and more.

What is rental yield and why is it important?

Rental yield is the potential returns a property investment makes, through rent. This is presented as a percentage figure that is calculated using annual rental income and the value of the property you own.

Landlords and investors use rental yield to monitor the value of the property they own, and any other property investment in their portfolio. Factors such as house prices increasing or decreasing, demand in the market for rental, and interest rates can all affect the growth of your rental yield.

It is vital to understand the ins and outs of what a rental yield is before you consider buying a buy-to-let property.

If your rental income only just about sees you breaking even each month, then unexpected maintenance costs such as boilers or radiators needing fixing may catch you out and end up impacting your finances to the point where you are actually paying out mor than you bring in.

So it’s important to take time to look into the rental yield of a property you’re interested in before making any final decisions.

Important things to consider with buy-to-let properties

House price trend

Before deciding on a region or area to look in, and the property type you are going for, it’s worth considering the current house trends at the time. Try to get a feel for the property you’re interested in and see whether there is potential for the value to grow over time. This can be done by checking out the area in which the property is located and find out the average value of other houses in and around the surrounding areas.

Tenant and rental demand

Another important factor to consider is what the tenant and rental demand is like within the areas you’re looking at. It might be worth speaking to various letting agents in the area, as they should be able to let you know what tenants are looking for and which properties could be a good buy-to-let investment.

Advantages of buy-to-let for landlords

Generate an income

When you purchase a buy-to-let property and start renting it out, the monthly rental fee tenants start paying will help you repay the mortgage taken out for the property, as well as make a little extra income.

Another thing worth considering when it comes to helping with income, is if the property you buy is located in the city or town centre, with high demand and lots of projects happening throughout, then the value of the property will likely increase over time meaning the rental yields will also climb too.

Reliable source of investment

Purchasing a property that you’re planning on using as buy-to-let is highly likely to become a reliable source of investment, as the demand for rental properties tend to remain high every year throughout the property market. So there’s a good chance it’s a steady investment with a fairly good chance of long-term financial gain.

In need of buy-to-let services? We can help!

If you require any further information about buy-to-let, and if you have any questions you want answering before getting started, our experienced legal team is on hand to help. They have been helping clients with their buy-to-let transactions for over 39 years!

Whether you have some key questions or queries you want answering before choosing GWlegal to help with your transaction, please contact Kerry Walker, our conveyancing manager, at Kerry.walker@gw.legal, Teresa Abols, at Teresa.abols@gw.legal or Helen Bond, at Helen.bond@gw.legal. Alternatively, you can call the property team directly on 0345 373 6130.

Who are GWlegal?

GWlegal are a property solicitors based in Liverpool, specialising in buying or selling, remortgage, declaration of trust, bridging and buy-to-let landlords.

If you have a legal matter you wish to discuss don’t hesitate to get in touch. You can call us on 0345 373 3737 email us hello@gw.legal with your question.

Who are GWlegal? We’re a national firm with local values.

Need a fixed-fee Conveyancing quote?

Click here get a quote

Content correct at time of publication.