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Southampton heads the United Kingdom's top 10 investor hostpots: HSBC

Rental yields of 7.82% and private rental accommodation making up almost a quarter of its housing stock make Southampton the best place in the UK for buy to let (BTL) investors, according to research from HSBC.

Of the fifty towns and cities with the highest concentration of private rental housing stock, Southampton topped the list for rental yield due to relatively affordable housing and an average rent of £901 per month ($A1334) with an average price of £138,311 ($204,800).

The relatively inexpensive property prices in Blackpool, Hull Manchester and Nottingham mean that these four Northern areas make up the rest of the top five, offering strong returns for BTL investors with yields of 7.81%, 7.77%, 7.60% and 7.55% respectively.

In sixth place, Coventry is the only other city offering returns above seven per cent with a yield of 7.13%.

Despite the high proportion of private rentals in the capital, London does not score highly in terms of rental yields due to the comparably high property prices.

 The top performing borough in the capital, Southwark, is 13th overall while the affluent London boroughs of Hammersmith and Fulham and Kensington and Chelsea are ranked in the bottom two places in the top 50 due to the high initial outlay to purchase a property, generating returns of just 3.42% and 3.34% respectively.

Top 10 Buy To Let Hotspots by Rental Yield

Location

Average Property Price

average rent (Monthly)

Rental Yield (gross)

  • 1. Southampton

£138,311

£901

7.82%

  • 2. Blackpool

£75,943

£494

7.81%

  • 3. Kingston upon Hull

£69,519

£450

7.77%

  • 4. Manchester

£102,631

£650

7.60%

  • 5. Nottingham

£83,313

£524

7.55%

  • 6. Coventry

£104,970

£624

7.13%

  • 7. Slough

£171,581

£975

6.82%

  • 8. Oxford

£244,893

£1,375

6.74%

  • 9. Liverpool

£91,012

£498

6.57%

  • 10. Portsmouth

£141,971

£775

6.55%

HSBC

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