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Letting returns make York ‘an honorary southerner’
9:47am Monday 18th February 2013 in Business news
YORK has been ranked as giving the highest return on investment to landlords of flats.
Property website Zoopla.co.uk ranked York first in its research into two-bed flats, with a yield of 8.56 per cent, calculated on the city’s average asking price for two-bed flats of £148,246, for which landlords can get an average rent of £1,057 per month.
York is followed by Peterborough and Bradford, while cities often compared to York rank much further down the list, with Edinburgh at 41st and Cambridge at 46th.
In Edinburgh, higher flat prices of £169,172 and lower rents of £754, bring its yield down to only 5.35 per cent. The list did not take into account any borrowings or other costs.
Lawrence Hall of Zoopla.co.uk said: “York is an honorary south-east location, helped by the fact it is home to a prestigious university. It could see some good capital growth but is starting from a lower price, which means it is more accessible to potential landlords.”
But he warned it was not all about yield, and landlords should also consider the likelihood of empty periods, especially if planning to let to students.
“It’s important that landlords and those hoping to get into buy-to-let don’t simply focus on the yield potential. Success in the rental market requires balance,” he said.
Tracey Hegarty, manager of lettings at the Micklegate branch of Bridgfords, said York was an excellent market which, when considering all types of properties, offered both capital growth on the value of properties as well as a high yield.
“The average rent is going up to just under £700 per calendar month, which is phenomenal as an average rent,” she said.