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11.6 percent average rental yield is CRAZY…

Image source: thegeographist.wordpress.com

If someone were to tell me that there are still properties out there which gives positive rental yields today, I would ask, where? If that someone were to tell me that I can still get double digits in rental yields, I would think it’s a scam, seriously. From Singapore to London and even Malaysia, due to the property prices rising way too fast versus the rental, the yield has dropped. Perhaps the current cooling measures will help in stabilising prices and rental will now have time to catch-up. When it comes to the UK property market, one city always pop up; London. One of the top finance capital city of the world. There are a lot of articles about them, today’s let’s look at the second largest city in the UK; Birmingham. Image shows the top 10 cities by population in the UK.
In a article in lettingagent.co.uk, it shows an analysis by online letting agency Urban.co.uk showing UK’s second largest city Birmingham has an average rental yield of 11.66% in the areas surrounding both Aston and Birmingham City universities. There are other locations where landlords can gain a very good return too. They include areas around Teeside University, Leeds Arts University, the University of Edinburgh, Nottingham Trent University and Bangor University – all of which have an average rental yield of over 8%. Next would be areas where the rental yields are poor. According to Urban, the least desirable university to purchase a property close by is South Kensington’s Heythrop College with an average expected yield of just 2.49% per year.  Other poor performers include the University of Westminster (2.67%), the University of Cambridge (2.87%), Anglia Ruskin University (2.92%) and Leeds Trinity University (2.93%).  Adam Male, founder of Urban.co.uk explains further, “The buy-to-let market will always be a profitable business close to the nation’s university campuses despite the impositions that have been forced on the buy-to-let market of late, as thousands of students are in desperate need for accommodation every year.”  The full article for reference here.
My brother-in-law loved his time in Birmingham University where he studied engineering. If only he had bought a unit there when he was studying. Haha. As for those studying in Cambridge University, well, the parents need not buy a property there because the yields are just too low. Better invest somewhere else. Recently, there’s also an article for the Birmingham property market in iProperty.com.my  Read it here   The article ends with this conclusion: “Ten years ago few would have believed that the city would transform so dramatically. With further transformational projects underway and exciting plans in the pipeline, the future looks bright for the Birmingham housing market.”  I have no overseas property but all these are always good points to note. More options are always better than just London all the time.
*Featured image source: http://visitbirmingham.com/what-to-do/shopping/shopping-centres
written on 27 Oct 2018
Next suggested article:  London property market dwarfs the rest
 

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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