Analysis by landlord insurer Direct Line for Business has revealed that with average house price values in Burnley at £76,300 and annual rents of £5,388, landlords in the area are able to leverage a better return on their property investment than other parts of the UK.
Glasgow comes in second with 6.9% and Belfast in following with annual yields of 6.4%.
House prices have risen by 17% in the last three years, while rents have increased by 4.7% over the same time.
Regional overview
On a broader regional level, Northern Ireland offers landlords the best yield, with a return of 5.6%. This is followed by Scotland with 5.3% and the North East with 5%.
Meanwhile, rental markets in London, the South East and the East of England offer the poorest yields on properties, largely due to the high cost of purchasing a property in these locations.
Rental yields in London, where the average house price exceeded £480,000 in 2017, stand at just 4.4%, despite average annual rents costing more than £20,000.
Likewise, yields in the South East are relatively low at 3.7%, while in the East of England annualised yield stands at 3.5%, the lowest in the UK.
Christina Dimitrov, business manager at Direct Line for Business, commented: “As the number of renters across the UK increases, so too has the number of private landlords, with more than five million privately-let properties currently in the UK.
“With this increased competition, it is more important than ever that landlords are able to offer their tenants well maintained and fully insured properties that will provide best return on their investment in the future.”
