The index looks at the average house price and median rent in 50 major towns and cities across the UK, calculating the average rental yield for each location. It found that since January this year average rental yields have remained strong across 34 of the 50 areas analysed.

But it is northern towns which it believes will prove most alluring to investors with three major cities topping the list of highest yields:

At the other end of the scale, some southern areas have struggled, with Chelmsford in Essex providing rental yields of less than 3%. London is also found in the bottom ten for rental yields at 3.45%.

Tarlochan Garcha, CEO at Kuflink, said: “This index shows that savvy investors should look to the regions where strong rents and more affordable house prices make for fruitful investment opportunities. The Northern Powerhouse is leading the way, while London falls by the wayside, as rents fail to keep up with rocketing house prices.

“The stability of both house prices and rents is a positive sign for buy-to-let investors, proving the strength of the UK’s property market, which is able to withstand the uncertainty surrounding the UK’s exit from the EU. The following few months will be the true test of the market, as Article 50 negotiations get underway.”

Sponsored

Shawbrook is the specialist mortgage sector’s ‘best kept secret’ – Sard

Sponsored by Shawbrook Bank

Kuflink’s index chimes with research from BM Solutions, which found that northern landlords were enjoying rental yields of more than 7%, while their counterparts in the south were generating returns of around 4.5%.