Top UK postcodes for high-yield, low-investment buy to let

The best five UK postcodes for buy to let investors to earn the highest returns with an investment of less than £100,000 have been revealed. 

According to Inventory Base, the current average rental yield is 4.3% for the UK’s landlords. 

However, some postcodes offer much higher yields, particularly for those with a lower investment cost. 

At the top of the list is Bradford's BD1 postcode district, where landlords can look forward to a rental yield of 13.1%.  

It helps that the house price in BD1 is just £63,988 on average, and the monthly rent is £697. 

'Build an instant portfolio' 

Chief executive of the firm, Steve Rad, said: "Buy to let landlords don't need to invest huge amounts of money to benefit from a strong rate of return and in some areas, you can invest in three properties for the price of the average UK home and build an instant portfolio with very strong yields.  

"But it's essential to remember that regardless of how much you invest, or where, your responsibilities as a landlord remain the same." 

He adds: "Cutting corners operationally in order to maximise returns is a surefire way to lose money in the long run and so it's important to carry out every aspect to the same professional level, whether that be property management, securing a tenant's deposit, or conducting inspections." 

The second-highest yield 

The data also shows that the Leeds' LS3 postcode has the second-highest yield at 12%, but the investment required is significantly higher than in BD1, with an average house price of £184,178.  

For investors seeking to spend less than £100,000, Sunderland's SR1 postcode district is a promising option.  

With house prices averaging £66,769 and monthly rents of £611 on average, SR1 offers a yield of 11%. 

Aberdeen's AB24 postcode also provides a solid return, with a yield of 9.2%.  

The average house price in AB24 is £92,708, and rents average £710 per month. 

The top five high yielding postcodes 

Rounding out the top five is Middlesbrough's TS3 postcode, offering an average yield of 8.6%.  

The average house price in TS3 is £90,528, and the average rental income is £648 per month. 

Hull’s HU2 postcode offers a yield of 8.3% with houses costing £90,853 on average with a rental income of £632. 

Long-term tenant demand drives growth ambitions 

In addition to the high-yield postcodes, Paragon Bank's latest 'The Next Generation Landlord Report', might prove useful for those contemplating property investment. 

It highlights the growing trend of landlords seeking to build larger property portfolios. The report's key findings include: 

• Long-term rental demand: Six in 10 landlords point tenant demand as a key factor to grow a portfolio 

• Retirement income: More than half of landlords want to boost their retirement income 

• Capital appreciation: Nearly half say rising house prices is a big reason for property investment 

• Preference for property: More than a third said property is preferred investment choice over other options. 

Build profitable property portfolios 

The managing director of Accommodation for Students, Simon Thompson, said: "As the rental market continues to grow, savvy landlords can capitalise on the opportunity to build profitable property portfolios. 

"By focusing on high-yield postcodes and prioritising long-term tenant demand, aspiring landlords can position themselves for success in the years to come." 

He added: "But as Mr Rad highlights, there are no shortcuts to becoming a successful landlord. 

"You will still need to be professional and meet all of the rules and legislation that govern the sector."