The Best Rental Yields for UK Expat and Foreign National Investors in April 2024

best rental yields 2024

‘Rental yields, rental yields, rental yields – it’s something that UK expat and foreign national investors will hear all the time’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘And justifiably so! Rental yields are one of the most important indicators for whether or not an investment venture will be successful. That’s why we’re running down the best rental yields for UK expat and foreign national investors in April 2024.’

‘In general,’ continues Stuart ‘when looking for an investment property, UK expat and foreign national investors should look out for a few main things, but top of the list are the capital gains prospects and the rental yield of the property. These capital gains projections will indicate the long-term success of the investment, while the rental yield will determine the short to medium-term success of the investment.’

What is a Rental Yield and Why is it Important?

For the uninitiated, a rental yield is the annual rental income expressed as a percentage of the property price. A rental yield can be split into the gross rental yield and the net rental yield. The gross rental yield doesn’t take into account any of the running costs of the property, while the net rental yield factors in the cost of maintaining and renting the property. According to Zoopla, the average gross rental yield in the UK at the moment is 5.6% so it’s important for would-be UK expat and foreign national investors to look for properties that have rental yields above this figure to secure an above-average investment.

Gross rental yields have been increasing along with rents, with rents rising faster than house prices. This is good news for UK expat and foreign national investors with house prices coming down slightly and rents projected to grow again this year, albeit at a slower rate.

Top Yielding Locations.

Looking at the rental yield data for different locations can help UK expat and foreign national investors to narrow down the location of their investment. ‘Currently, there’s a big desire for city properties, with more and more tenants favouring these properties. These properties are usually very mortgage friendly and more futureproof than other types of property. For this reason, we’re advising many UK expat and foreign national investors to look into city-centre properties. Another trend that we’ve seen is that Northern properties are performing much better than Southern properties when it comes to rental yields. This is because properties in the Southern regions tend to have much higher prices than Northern properties, so this hurts the rental yields of these properties. Consequently, the best rental yields in April 2024 are Northern, with the top 17 cities for rental yields are all in the North.’

The highest yielding cities at the moment are Sunderland, Aberdeen and Burnley, which all offer investors gross rental yields of over 8%. Following closely behind are Dundee (7.96%), Glasgow (7.95%), Middlesbrough (7.92%), Blackburn (7.52%), Hull (7.45%), Newcastle (7.45%), Liverpool (7.44%) and Stoke (7.38%).

Investors can also look a bit broader – at the average rental yields for regions. When looking at the regional picture, the North East offers the best average yield at 7.65%. Rents in this region are actually cheaper than anywhere else in the country (at an average of £695) but buy-to-let properties are also far cheaper than anywhere else, with an average cost of £109,072. The next best performers for regions are Scotland (7.48%), the North West (6.66%), Wales (6.43%), and Yorkshire & the Humber (6.38%). All of these regions have seen increases in their gross rental yields in the last 3 months, indicating a promising trajectory for any UK expat and foreign national investors investing in these regions too.

The Outlook.

‘While UK rent rises are slowing down slightly, rents are still sky high and they’re projected to continue growing, albeit at a slower rate. With new investment from landlords remaining low, there is an excellent opportunity for UK expat and foreign national investors to utilise the specialist mortgage products available to them through expert brokers to meet some of the demand from renters. House prices are also predicted to stay roughly the same this year, with discounts available for buyers in a strong negotiating position.’

‘Of course, there are other things than just the rental yield to consider when deciding on an investment location. For example, considering tenant demand is vital, as it will determine whether rental yields will stay high/grow further and whether the value of the property will appreciate more than in other areas. House price trends are also important for anticipating whether the property is likely to rise in value. This can be determined by looking at historic sale prices and value increases in the postcode. The cost of a buy-to-let mortgage is also incredibly important as this will go a long way to determining the running costs of the investment property. Expert UK expat and foreign national mortgage brokers like Liquid Expat Mortgages can help to ensure that UK expat and foreign national investors get the best mortgage deal possible.’

Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Haslingden, Rossendale
Phone: 0161 871 1216

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