For investors considering making a buy to let purchase, knowing about the best areas for rental demand is key.
Investors want to be sure that their investment is not only well-priced and capable of bringing in a large return on investment, but they also want to ensure that they don’t experience any void periods where the property goes untenanted.
Recent research from Benham and Reeves, and covered on Buy Association, has investigated the amount that the average tenant in the UK spends on rent and looks at this in proportion with their salary.
This research revealed that out of all regions in the UK, renters in the North West are getting more for their money than in any other area.
North West Renters Have More Take-Home Pay
After rental costs and other essential outgoings, it’s been revealed that people renting a property in the North West region have more take-home pay.
This means that properties in the North West region are the best value in the country.
Here, renters are paying an average of 58% of their monthly income on rental costs. This is lower than the 63% average for the UK.
These findings were calculated by taking the region’s average monthly household income of £2,900 and comparing it to the region’s current average rental cost of £658 per month.
The worst take-home pay rate was found in the South-West, where monthly expenditure as a percentage of household income stands at 73%. In London, a percentage of 72% was revealed.
What Does This Mean?
The North West is one of the UK’s most popular rental hotspots, and this research has only further validated this idea.
Groups such as young professionals and students want to rent a property that not only fits their price range but is also high-quality, stylish, and convenient in terms of location and local amenities.
In North West cities like Liverpool, tenants can bag a luxurious new build apartment in the city centre for around £700 a month. In more expensive cities like London, average costs of £2,000 to £3,000 a month are more likely for a central apartment.
In recent years, more young people have been moving to North West cities such as Manchester to take advantage of better affordability, job opportunities, and all-round better quality of life.
Knowing that rental properties in the North West offer better value for money than those in other areas, young renters that are tired of the unachievable costs of living in the capital are more likely to head to cities like Liverpool and Manchester.
As North West demand increases further, rental values are set to rise over the coming years, resulting in even higher average rental yields for investors buying property in the region.