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Oxford best city for buy-to-let investment

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Written by: Liz Bury
10/12/2019
The south of England offers long-term investment potential, while landlords in Yorkshire achieve below average yields

Aldermore has named Oxford the best city for buy-to-let investment in the UK.

The city emerged top of 25 analysed in the bank’s Buy to Let City Tracker, with Manchester, Edinburgh, London and Norwich making up the rest of the top five.

Oxford’s biggest selling point for private landlords was that it was one of the largest private sector rental markets in the UK, with 28 per cent of all residents renting privately.

The city’s average monthly rent for a room was £596, it has low levels of vacancy and average property prices have grown at 4.8 per cent a year over the past decade.

The tracker analysed five measures of buy-to-let investment desirability. They were average total rent, best short-term returns through yield, long-term return through house price growth over the past decade, lowest number of vacancies as a proportion of total housing stock, and percentage of population renting.

The five cities ranked lowest on the list were Derby, Sheffield, Bradford, Newcastle and Wolverhampton.

Strong down south

Regionally, the south of England appeared strongest overall, with good long-term investment prospects. Bristol averaged annual house price rises of 4.8 per cent over the ten-year period, the same as Oxford.

The Midlands was revealed to be a mixed market, with Nottingham showing impressive short-term yield of 7.3 per cent.

Yorkshire was less strong overall, with lower average prices per room and below average yields.

“The number of people renting in the UK has grown rapidly, by 1.7 million in 10 years, and private landlords are increasingly a central part of the housing market,” said Damian Thompson, director of mortgages at Aldermore.

“The housing market is made up of multiple small markets with their own conditions and challenges.

“Regulatory changes and persistent economic uncertainty have affected regions differently and landlords need backing and advice from lenders,” Thompson added.

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