London and the North East provide Buy-to-Let investors with strongest returns over the last five years

The latest research by London lettings and estate agent, Benham and Reeves, has revealed that whilst the London property market has boasted one of the strongest performances when it comes to the average yield secured for Buy-to-Let investors over the last five years, one region has outperformed the Capital.

Benham and Reeves analysed the average rental yield found across each area of the rental market in England*, looking at rental market performance over the last five years to reveal where has seen the most consistently strongest performance based on the five year average.

The research shows that across England as a whole, the average Buy-to-Let investor has enjoyed an average rental market yield of 4.17% over the last five years.

London remains one of the strongest areas of the market when it comes to investing into rental bricks and mortar, with Buy-to-Let investors enjoying an average rental yield of 4.42% over the last five years.

However, one region has outperformed the capital and that’s the North East. Over the last five years, the average rental yield across the region has averaged 4.84%, the strongest returns seen across England.

London is sandwiched between both northern regions, with the North West seeing the third strongest performance across the nation, with an average rental yield of 4.38% over the last five years.

Yorkshire and the Humber has also seen one of the strongest returns offered to investors over the last five years, with an average rental yield of 4.29%, followed by the South West 4.03%.

At the opposite end of the table it’s the East Midlands that ranks as the weakest region of the rental market when it comes to the returns seen for Buy-to-Let investors. Over the last five years, the average rental yield across the region has sat at just 3.83%.

Director of Benham and Reeves, Marc von Grundherr, commented

“Landlords have been hit hard in recent years with respect to the profitability of their portfolios and we have yet more red tape on the way this year via the government’s misguided Renters’ Rights Bill.

Despite this, many have continued to enjoy the returns that are still available through well-informed and strategic investment into rental bricks and mortar and it’s fair to say that London remains the most lucrative area of the market, with the exception of the North East.

We’ve seen a particularly strong performance across the North, with a lower cost of investment contributing to favourable yields. However, where London’s is concerned, the returns on offer are being very much driven by a buoyant rental market, fuelled by an overwhelming level of tenant demand.

The likelihood is that very little will change in 2025 and despite the government meddling under the guise of improved tenant welfare, we expect Buy-to-Let to remain one of the most consistent investments available to the amateur and professional investor alike.”