Property Investment London

A Guide to Buy to Let Postcodes in Liverpool Vs London

When analysing the best areas to invest in property, learning about possible rental yields is one of the most effective strategies. Totally Money’s Buy to Let Yield Map takes into account 500,000 properties across England, Scotland and Wales to reveal the best buy to let cities and towns in Britain. A go-to source for investors aiming to discover the highest rental yields, UK site Totally Money’s data findings for 2019/20 have once again pointed landlords in the direction of Liverpool which features a total of seven of its postcodes in the top 25 list. Within the same guide, they also look at some of the best and worst yields in London.

The question on many property investors lips is whether to purchase a buy to let property in the North or in the South. Two of the UK’s most significant cities, Liverpool and London, both generate a lot of interest in their property markets. But which of these cities actually offers the best rental yields? With an ongoing battle between the North and the South being a big factor in the UK property market, we’ve spent some time comparing rental yields listed by TotallyMoney in Liverpool vs London to understand which city offers the best potential returns. If you’re keen to find out how these two UK cities compare, keep reading our guide to buy to let postcodes in Liverpool and London.

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Liverpool Vs London: The Best Buy to Let Yields

Every city has a postcode area which generates the best possible rental yields for investors. Higher yields tend to be found in areas where property is more affordable to purchase, while rental costs remain high. So, when it comes to the best buy to let yields in Liverpool vs London, which city offers the most potential?

L1 – Liverpool

Spanning Liverpool City Centre, L1 is a postcode area which ticks all the boxes in terms of buy to let appeal. Offering yields of 10%, L1 has the top spot as the best buy to let postcode in the UK, outranking other high yield areas like Glasgow and Leeds. With an average property price of £112,380 according to Zoopla, those looking to invest in this Liverpool hotspot can expect to pay a lot less than they would elsewhere, without sacrificing quality. With a wide range of demand from students and young professionals thanks to trendy spots like the Baltic Triangle and regeneration projects such as Liverpool One, investing in the L1 area is an all-round attractive option.

E12 – London 

Offering rental yields of 6.04%, London’s E12 postcode is ranked as the best buy to let area in the city. Home to the Manor Park district of Newham and Redbridge, this part of London is attracting attention for its investment potential due to the highest London yields, and lower property prices compared to other parts of the capital. With an average price of £396,693 according to Zoopla, property in the E12 postcode isn’t exactly cheap when compared to L1, but still lower than the average price paid in more affluent boroughs. While 6.04% is low in comparison to Liverpool’s 10% yields in L1, it’s certainly one of the highest yields investors can generate in the capital right now.

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Liverpool vs London: A Tale of Two Kensingtons

Both Liverpool and London have their very own, very different, Kensington areas. While the names may be the same, the property market within each area has some clear differences. Let’s take a look at each postcode and their buy to let yields.

L6 – Liverpool

Liverpool’s L6 postcode, spanning the Kensington area, offers some impressive rental yields of 8.12%. Much like the L1 postcode, property prices in Kensington are low. However, the proximity to the city centre means that more demand has been drawn to the neighbourhood, resulting in higher rental rates and overall better returns. More and more investors exploring Liverpool property investment are considering buy to let purchases in L6, particularly those looking to invest in student property.

 SWS – London 

Home to the Earls Court district of Kensington, the SW5 postcode makes TotallyMoney’s list of some of the worst buy to let postcodes in London, with a disappointing 2.49% yield. Kensington is well-known as one of London’s most affluent boroughs, so it comes as no surprise that the high purchase costs in this area cause rental returns to be limited. The Liverpool Echo actually did a comparison of Liverpool’s Kensington area vs Kensington in London, finding that for £100,000, buyers in Liverpool could bag a three-bedroom terraced house while in London’s Kensington they could only afford a car garage for the same price.

More and more investors exploring Liverpool property investment are considering buy to let purchases in L6, particularly those looking to invest in student property.

- Amy Jackson, RWinvest

Liverpool vs London: Regeneration Zones

Regeneration is always a key factor when it comes to finding the right area to invest in. Aside from boosting potential capital growth, areas with significant regeneration are also capable of attracting further rental demand due to becoming more desirable spots to live in. Here are two of the most notable regeneration areas in Liverpool and London, with details of their buy to let potential.

L4 – Liverpool

Liverpool’s L4 postcode spans part of the Anfield area. Home to the famous LFC stadium, this once run-down and abandoned part of the city has been undergoing extensive regeneration over recent years. The multi-million pound Anfield Project aims to improve quality of life for residents of the area and those visiting the stadium. As a result of this regeneration and the increasing appeal of living in the L4 postcode, the area boasts yields of 7.13%. Pair this with the heightened possibility of high capital growth, and investing in L4 is a great buy to let option.

SW1V – London

The London postcode of SW1V is home to the Wandsworth borough. Wandsworth is a key regeneration zone in the capital, with a number of projects and new developments breathing new life into the area. Much like Liverpool’s Anfield, developments in Wandsworth include a new Wimbledon football stadium, with the first phase set to complete in 2021. Despite these big plans for regeneration in the area, the SW1V postcode still offers investors some disappointing yields at 2.49%. It’s too early to tell whether or not the completion of ongoing regeneration projects in the area will improve rental yield potential.

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Liverpool vs London: Young Professional Hotspots

Young professionals make up a large proportion of renters in the UK. As a result, many investors focus on the parts of a city that are highly desirable to this tennat group in order to maintain strong levels of demand and generate consistent returns. Here are two spots in Liverpool and London which are considered popular for young professional renters.

L2 – Liverpool

Making up one half of the main city centre with L1, the L2 postcode is a busy hive for business and leisure. Liverpool James Street station and Moorfields station are situated within this quarter providing expert transport networks across the city, while the postcode also acts as the core of Liverpool’s Commercial District where an abundance of businesses provide jobs to Liverpool workers. Because of the wide range of business opportunities available, the L2 postcode is considered a hotspot for young professional renters in the city. With yields of 7.56%, buy to let investors purchasing property in this area can expect the perfect combination of attractive yields and high demand.

WC1 – London

Camden is, without a doubt, one of the most desirable London boroughs for young professionals living in the city. Offering up a trendy and eclectic feel with hipster markets and plenty to see and do, this is the perfect area for young professionals keen to soak up London’s cultural offerings. Despite the ever-growing appeal of the area, rental yields in WC1 still fall short, standing at 2.28%. Like many other of London’s trendiest spots such as Notting Hill and Shoreditch, Camden property prices are increasingly high, with a current asking price of a whopping £1,712,965 according to Zoopla. Even with high rental costs of up to £1,918 for a one-bedroom flat alone, property prices in the area are still too high to generate strong enough returns.

A Poor Performance For London

All in all, it’s clear that when it comes to Liverpool vs London property investment, Liverpool has the best buy to let potential. If you’re looking to find the highest yields for your property venture, postcodes like L1, L6, L4 and L2 are some of the strongest in both Liverpool and the UK as a whole. While London does offer some attractive yields in certain areas, such as E12, highs of 6.04% remain disappointing compared to Liverpool’s soaring yields.

 

If you’re ready to make a buy to let investment in the UK’s top rental yield city, explore our Liverpool property investment opportunities now. We have investment properties in hotspot postcodes like L1, along with some fantastic luxury apartments in key Manchester areas.

If you’d like to read more guides to property investment and news about the UK property market, head over to our buy to let news section for more great content.

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