In the latest quarterly study from peer-to-peer property lender LendInvest looking at buy to let landlords’ total return on investment since 2010, rental yields came out on top in Manchester, Liverpool, Cardiff, Coventry and Oldham.

London and the South East sustained the highest UK house price growth, with capital gains on property continuing to track the average house price. However, landlords in the capital were dealt a blow when it came to rental yields where they are currently ranked in 18^th place across the UK.

The research revealed that rental yields showed no correlation with average house prices, with only Outer London included in the top 15 regions for both rental yields and house prices.

LendInvest’s CEO Christian Faes said that the upcoming changes to mortgage interest tax relief and Stamp Duty for landlords would help to ‘professionalise’ the buy-to-let market.

“Landlords whose tax payments under the new regime make letting their properties unsustainable, may make arrangements to leave the market. In turn, we will see fewer highly geared rental properties that push up prices and take stock out of the housing supply for aspiring owner-occupiers and first-time buyers drawn to densely populated urban area for work,” he said.

“Across the country there is still no one place for market-leading yields and capital gains. 2016 could be the year of the “cross-country landlords” – professional landlords who live in one city and rent out houses in another. We could expect to see more landlords letting property in the North and Midland’s major urban areas for more immediate upside, without moving from their family homes in which gains can be longer to materialise.”

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