It’s not an easy time for landlords. In addition to new rental regulations, rising buy-to-let rates caused by war in the Middle East are putting even more pressure on profits.
We’ve heard from landlords who’ve had enough and are choosing to exit the sector altogether, but for those who stick around there are still decent returns to be found – and you don’t even need a large lump sum to get them.
Here, we reveal the best places to invest with a cash budget of £25,000 – enough to cover a 25pc mortgage deposit and stamp duty – using data from Hamptons estate agency.
At this deposit level, landlords can be helped by low house prices, which keep stamp duty costs and mortgage repayments down, meaning more rental profit.
This amount lets you start a buy-to-let portfolio in 15 local authorities, according to Hamptons, all of which are located outside the south of England, but in many cases offer potential double-digit returns.
In the three locations we’ve picked below, an initial £25,000 investment could produce an average gross yield of more than 12pc.
That is significantly more than the target 4pc rate of income from a typical pension pot in drawdown, making it an attractive option for retirees.
Where will £25k earn you the highest returns?
The table below shows the areas with the highest buy-to-let returns across flats, terraced houses and semi-detached properties, in order of average yields on flats.
