Flats have emerged as the best buy-to-let investment option for landlords, thanks to cooling property values and significant rental growth, according to the latest market analysis by Inventory Base, the UK’s leading property inventory specialists.
The analysis indicates that flats have seen the strongest annual increase in average yield compared to other property types.
The research, which examined current market data on rental values and house prices across various property types, found that flats offer the highest average yield at 6.4% across Britain. Terraced homes follow closely at 6.3%, with semi-detached homes providing a yield of 5.3%. Detached properties, however, offer a comparatively lower yield of 3.9%.
Flats have not only shown the best returns in the current market but have also experienced a decrease in average property values by -0.9% over the last year. Simultaneously, the average monthly rental value for flats has increased by 9.3%, the highest growth among all property types.
This combination has resulted in the average yield for flats rising by 0.6% in the past year, outpacing the yield growth of terraced homes (0.4%), semi-detached homes (0.2%), and detached homes (0.2%).
Sián Hemming-Metcalfe at Inventory Base said: “Flats not only offer buy-to-let investors a generally more affordable entry point for their initial investment, but they also benefit from a rental market that sees higher tenant demand and, consequently, stronger rental price growth.
“While the capital appreciation may not match that of other property types, flats come with a host of advantages for investors, including lower running costs and a smoother process when it comes to renting and managing the property.”
Hemming-Metcalfe added: “Efficiency is crucial for managing the bottom line, and this is where detailed and accurate property reports become indispensable. These reports document and maintain all aspects of the property, significantly reducing the risk of disputes and costly repairs.
“In the end, it’s the combination of strong returns, convenience, and time saved—underpinned by the precision of thorough property reports—that makes flats such an appealing investment.”
