London and the North East are among the regions that have secured the highest rental returns for buy-to-let (BTL) investors over the past five years, the latest research from Benham and Reeves has revealed.
Benham and Reeves analysed the average rental yield found across each area of the rental market in England, looking at rental market performance over the past five years.
The research showed that across England as a whole, the average buy-to-let investor received an average rental market yield of 4.17%.
London remained one of the strongest areas of the market when it comes to investing into rental bricks and mortar, with investors enjoying an average rental yield of 4.42% over the past five years.
However, one region has outperformed the capital – the North East.
The average rental yield across the region averaged 4.84%, the strongest returns seen across England.
The North West recorded the third strongest performance across the nation, with an average rental yield of 4.38%.
Yorkshire and the Humber also saw one of the strongest returns, with an average rental yield of 4.29%, followed by the South West at 4.03%.
At the opposite end of the table, the East Midlands ranked as the weakest region of the rental market when it comes to the returns.
Over the past five years, the average rental yield across the region sat at just 3.83%.
Marc von Grundherr, director of Benham and Reeves, said: “Landlords have been hit hard in recent years with respect to the profitability of their portfolios and we have yet more red tape on the way this year via the government’s misguided Renters’ Rights Bill.
“Despite this, many have continued to enjoy the returns that are still available through well-informed and strategic investment into rental bricks and mortar and it’s fair to say that London remains the most lucrative area of the market, with the exception of the North East.”
He added: “We’ve seen a particularly strong performance across the North, with a lower cost of investment contributing to favourable yields.
“However, where London’s is concerned, the returns on offer are being very much driven by a buoyant rental market, fuelled by an overwhelming level of tenant demand.
“The likelihood is that very little will change in 2025 and despite the government meddling under the guise of improved tenant welfare, we expect buy-to-let to remain one of the most consistent investments available to the amateur and professional investor alike.”
