The busy UK rental market means that UK expat and foreign national investors can reap big rewards from the right investment property. But with house prices remaining stubbornly high and high mortgage rates, UK expat and foreign national investors need to make sure they put their money in the right area to maximise their returns from UK expat buy-to-let.
What to Look For.
‘The first thing UK expat and foreign national investors should look at when considering where to purchase a buy-to-let property is the rental yield’ says Stuart Marshall. ‘The rental yield is the amount of rental income relative to the value of the property expressed as a percentage. The current average yield for the UK is just over 5% so any area with a higher rental yield figure than this will be a desirable property for UK expat and foreign national investors. Of course, rental yields are not the only relevant factor for a good buy-to-let. House price growth is another important factor as it will contribute to the long-term success of the investment and determine the capital growth potential of the property.’
The Regional Picture for UK Expat Buy-to-Let.
‘When it comes to the regional picture for rental yields, Zoopla reports that the North East is currently leading the pack, with an average rental yield of 7.2%. This is good news for first-time UK expat and foreign national investors or those looking to add to an existing portfolio as the North East is one of the most affordable areas in the UK, with the average buy-to-let property costing £109,000. This means the average rent of £649 per month is a great instant return on investment. Potential UK expat and foreign national investors should be considered about where to invest though as the North East’s yield is pushed higher by specific areas, including Sunderland, the borough of Middlesbrough and Hartlepool (with 8.39%, 8.16% and 8.01% yields respectively).’
Other standout regions include Scotland and the North West, where average rental yields are 7.1% and 6.3% respectively. These regions have performed well for quite a while now as key hotspots in these regions continue to grow, adding to their appeal as employment and social hubs. ‘For UK expat and foreign national investors looking to invest for maximised monthly income and a quicker return on investment, looking for areas with high rental yields is the best strategy. And there are not too many other areas to consider with rental yields in mind – there are only two other regions with rental yields of at least 1% above the UK average. These regions are Yorkshire and the Humber, and Wales, with 6.1% and 6% yields respectively.
‘Below, we’ve listed some of the highest yielding areas within each of the top 5 yielding regions of the UK. This can help UK expat and foreign national investors to narrow down an area that they might be interested in. However, there is no substitute for talking to an expert UK expat or foreign national broker on a one-to-one basis. This can really help UK expat and foreign national investors to refine their thinking and guide them through the whole investment process: from thinking about investing to completion.’
Sunderland (8.39% rental yield)
Middlesbrough (8.16% rental yield)
Hartlepool (8.01% rental yield)
West Dunbartonshire (9.05% rental yield)
Renfrewshire (8.96% rental yield)
East Ayrshire (8.58% rental yield)
Burnley (8.11% rental yield)
Barrow-in-Furness (7.43% rental yield)
Liverpool (7.32% rental yield)
Yorkshire and the Humber:
Hull (7.03% rental yield)
North East Lincolnshire (6.92% rental yield)
Bradford (6.86% rental yield)
Blaenau Gwent (7.25% rental yield)
Merthyr Tydfil (6.94% rental yield)
Neath Port Talbot (6.89% rental yield)
Looking at Cities.
Looking at a more fine-grained picture for rental yields, the best performing cities are Sunderland, Dundee and Burnley, with yields of 8.39%, 7.85% and 7.73% respectively. All of these areas also have reassuringly low average buy-to-let property prices of £83,000, £117,500, and £82,000 respectively. Other attractive cities for UK expat and foreign national investors are Glasgow, Middlesbrough, and Liverpool, with rental yields of 7.73%, 7.53% and 7.21% respectively. ‘Cities like Liverpool and Glasgow can be incredibly important for UK expat and foreign national investors as many of these investors are looking to purchase a property in major cities’ says Stuart Marshall. ‘This is because cities are very appealing to attractive renter groups at the moment – in particular, young professionals. These young professionals are unwilling to buy property at the moment because of stubbornly high property prices and high mortgage rates as well as the cost-of-living crisis. However, this same group are looking to be in vibrant city centre environments, both to be in close proximity to their workplace or potential employers, and also to maintain a fulfilling social life.’
The Bigger Picture.
‘As we noted, there is obviously more to the success of an investment than the rental yield. And the particular attributes that will be attractive in a property will differ depending on which UK expat or foreign national is investing. Each investor will have their own distinct goals and reasons for investing, so it’s important to consider these when looking at the property. In general though, a strong rental yield from an affordable property is likely to be a good investment for UK expat and foreign national investors. This combination will assure good monthly incomes from the investment as well as a quick return on investment. Further, an affordable property with strong rental yields means that there is likely good demand in that area, which is contributing to good rental returns. This, in turn, means that the property is more likely to appreciate as rental demand in the area is likely to translate to buyer demand.’
‘Talking to an expert UK expat or foreign national mortgage broker can be a massive help for potential investors as they can help the investor to assess their goals and decide on an area or property that is likely to fulfil these goals. They are also able to help UK expat and foreign nationals to secure the best available mortgage deal, including from specialist lenders.’
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Road, Rossendale,
BB4 5HU, United Kingdom.
Phone: 0161 871 1216
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