Last week we reported that, contrary to expectations, the buy-to-let market is shrugging off market woes and proving a profitable form of investment. If, despite the uncertainty of Brexit, this has pricked up your ears, you might like to start your research into the best place to buy for potential profit.
And why consider buying to let just up the road if there's more profit potential in other parts of the country? There are many online tools for potential buy-to-let landlords, the latest being 'Buy-to-let Hotspots (opens in new tab)', which allows users to find out where renting out a property can return the greatest yield, ranging from 1.12 per cent to 15 per cent.
All users need to do is enter a postcode or the name of a city or town they’re interested in finding out the rental yield for, and the tool will show the projections for that location and nearby surrounding areas on an interactive map.
The tool uses online property listings to establish the average cost to buy a property, and the average monthly rent in each postcode, town or city, and divides the property price by the average monthly rent to figure out the rental yield.
The most profitable buy-to-let postcode in the UK? L6 in Liverpool. In fact, Liverpool figured prominently in the top five with two postcodes. Sunderland and Middlesbrough also figure in the top spot, promising rental profit yields of 13.6 per cent each.
The fashionable seaside resort of Salcombe in Devon, on the other hand, will get you only a tiny return on your buy-to-let investment, at 1.16 per cent. The postcode where renting out a property is more trouble than it's worth? WC1A, London. London took three of the top five least profitable rental locations: if you're thinking of renting out a house in N18 or W1J, you'll see meagre profits of just over one per cent.
Whether you're looking to invest in buy-to-let or for a home for yourself, consult our guide to buying a house or flat first.