Where landlords can enjoy the best investment returns

Three Yorkshire cities have outperformed traditional investment hotspots like London, Birmingham and Manchester in terms of property price growth since interest rates began to rise in December 2021. 

According to a new analysis by peer-to-peer real estate investment platform, easyMoney, of average house price data across 15 major UK cities, the national average has increased by 7% since the end of 2021. 

However, some regions have experienced significantly more robust growth. 

Sheffield emerges as the top performer, with house prices soaring by 12.7%.  

Bradford followed closely behind with a 10.3% increase, while Leeds saw prices rise by 10%. 

Made property purchasing more expensive  

The chief executive of easyMoney, Jason Ferrando, said: "When the Bank of England started increasing interest rates at the end of 2021, it made property purchasing more expensive for the vast majority of people who require the help of a mortgage.  

"This includes property investors of all shapes and sizes. 

"And because buying became more expensive, fewer buyers entered the market and this fall in demand means prices have struggled." 

He added: "But as is always the case with the British housing market, even when the national picture shows muted growth, there are always corners and pockets where prices are rising at pace. In the past few years, the best of these pockets appear to have been Yorkshire cities." 

Cities that outpaced the national average 

Other cities that have outpaced the national average include Newcastle, Leicester, Bristol, Edinburgh, Cardiff, Glasgow, Nottingham, and Liverpool.  

However, some of the traditional investment hotspots have struggled to keep pace.  

The research highlights that London and Manchester, for example, have only seen price growth of 2.3% each. 

Mr Ferrando said: "The best, most astute property investors are wise to the fact that when price growth stutters in one city, it will be booming in another, so a smart investor who normally invests in Manchester will have shifted their attention to Sheffield, for example, for the past couple of years. 

"If you're looking to make good returns from property investment, it's vital to have a good overview of the national market and all of its individual local markets, too." 

Where the best yields are 

News of where the best investment areas are coincides with research from Lomond highlighting where the best yields are. 

Its study has identified the UK's most promising rental hotspots, where rising rents and slowing house prices have led to big increases in rental yields. 

Lomond found that the average monthly rent in England and Wales has increased by 8.2% over the past year, outpacing the 2.2% growth in house prices.  

This has boosted the average rental yield from 4% to 4.2%. 

Every region of England and Wales has experienced positive yield growth, with London, the South East, and North West seeing the largest improvements.  

However, the North East boasts the highest overall yield at 4.9%. 

Potential as investment destinations 

The managing director of Accommodation for Students, Simon Thompson, said: "The Yorkshire cities have demonstrated their resilience and potential as investment destinations. 

"For investors seeking strong returns, these cities offer a compelling opportunity.  

"However, all property investors need to carefully analyse local market dynamics and identify undervalued properties because it's possible to achieve significant capital appreciation." 

He added: "Yield is also important and the findings by Lomond show that the north of England really does need to be checked out, particularly the North East."