Houses in Northern England are currently delivering the highest rental returns in the UK, according to the Association of Residential Letting Agents (ARLA).
It found that rental returns in the North East and North West have been rising steadily since the end of 2011.
In August they hit 5.7 per cent and 6 per cent respectively, making the North West the region with the highest rental return in the UK.
However, the average capital value of rented houses remains highest in London and the South East, and lowest the North East and the Midlands. In Central London the average value of a rented house stands at £1,251,000 compared to £175,000 in the North East and £172,000 in the Midlands.
ARLA managing director Ian Potter said: “Our data shows that the North West is presently showing the highest return on rental investment. But these figures show the Private Rented Sector is experiencing the same regional variations as the sales market, and therefore investors should move with caution.
“Properties in Central London are outperforming the South East region as a whole in terms of the capital asset value of buy-to-let properties. Indeed the South East region, excluding Central London, saw a sharp fall in the values of buy to let flats of 2.2 per cent over the quarter, showing that recovery in property prices following the recession is still limited to the capital’s most in-demand postcodes.”
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