Where are the best areas to purchase a buy-to-let property?

7 November 2014

The property market is once again making news with a rise in rental prices and continued low interest rates causing more people to look at investing in property. The rental sector has increased by 18% in July this year, and by 7% since June. Although the improving market is something many are happy to see, first time investors can feel very uneasy when attempting to navigate terrain they know little or nothing about. One of the key components to making the buy-to-let market work for you, is knowing where the best yields are most likely to appear.

Luckily, TotallyMoney.com have released an interactive map of the UK which highlights which locations will deliver the best and very worst annual returns; an invaluable tool that all potential investors should have a look at. The 'Yield Interactive Heat Map' is a carefully crafted array of data from over 2,682 postcodes and 751,600 properties amassed from home.co.uk and Wikipedia.

Looking at the map and the table provided, you can see a geographical divide between the North and South of the country, with Scotland, the North and Midlands coming out in the top ten, while the South and South East are less fortunate at the bottom. Put plainly, if you're looking at investing in Sheffield City Centre, you may see a substantial yield of 11.06%, whereas in an area like Dartmouth you are only expected to enjoy a disappointing 2.03% annual return. As you can see, there is a dramatic difference between the two that isn't easily ignored.

This data map, when used alongside other tools and handy tips, can radically alter the likelihood of your success within the buy-to-let market. Smart and well researched investors will always do a lot more than simply select a promising area, they will also consider their target market of tenants and what type of properties appeal to them. What is more, they'll also shop around and look out for the best deals and not just eagerly accept the first offer that comes along.

Clearly the property market is once again bearing fruit for buyers and renters to take advantage of, however, that doesn't mean that investors should become too hasty in an attempt to reap quick fix benefits. Doing your homework and researching what areas hold what yield for you is one tool of the trade that will help make understanding the sector that much easier.

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