Some parts of Birmingham are currently showing higher rental yields than London, an expert has claimed.
Andrew Bryant, sales and lettings manager at CPBigwood, says the statistics are another reason for owners to take the plunge and put their properties on to the rental market.
He said: “Forget London, it’s Birmingham that pays off when it comes to rents.
“Yet we have been fighting a severe shortage of quality rental despite strong rents being achieved. Further rental stock is urgently required.
“The message that needs to come across is – the rewards are there so take advantage of them.”
Data from lending platform LendInvest shows the highest rental yield postcodes from the first quarter of this year can now be found in Birmingham, Ipswich, Liverpool and Glasgow.
But postcodes around north and central London are still delivering the best overall returns on investment, thanks to capital gains delivered by rising house prices.
So, for example, B1 and B2 yields, covering Birmingham city centre, are, according to LendInvest coming in at 5.75 per cent and 7.22 per cent respectively.
Edgbaston, B16, is on 7.28 per cent, Kings Heath, B14, 5.83 per cent and Moseley/Billesley, B13, 4.93 per cent.
And there are one or two quite surprising results with rental yields in Washwood Heath, Ward End and Billesley, B8, hitting 7.43 per cent.
Mr Bryant said: “These are very strong figures and should encourage further growth in the buy-to-let sector.
“Investors need to assess both rental yield and likely capital growth when analysing particular localities.
“It is important to do your homework – depending on the area there can be big differences in the amount of rental income you receive and how much your property will appreciate by.”
Based on data from the first quarter of 2015, the LendInvest Buy-to-Let Index shows the average rental yield for a one-bed property across the UK is 5.9 per cent, compared with 5.3 per cent for a two-bed, 4.7 per cent for a three-bed and four per cent for a four-bed.