Luton tops UK buy-to-let index

by: Heather Greig-Smith
  • 16/11/2016
  • 0
Luton tops UK buy-to-let index
Luton is the UK’s number one buy-to-let location, according to LendInvest’s revamped index.

The Bedfordshire town saw rental prices jump 10% during the year from September 2015 to August 2016. It was closely followed by neighbour Stevenage, which saw a 9% boost.

The top 10 postcodes are predominantly in the South East, LendInvest said, as it released its quarterly research on the market. The only location outside the region was Northampton, which was rated fourth.

The new format index ranks postcodes on capital value growth, transaction volumes, yield and rental price growth. Enfield in North London was ranked third overall but saw the largest capital gains at 17.4%.

Christian Faes, co-founder and chief executive of LendInvest, said there are a host of different factors that investors must take into account before buying, but that capital value growth is key.

“The big one is of course capital values – you want to buy a property that is going to increase in value during your ownership. The prospects for further house price growth is good – we still aren’t building anywhere near enough homes in the UK – but there are regional differences to take into account,” he said.

“The capital value growth seen in postcodes in the South East are significantly higher than those elsewhere in England and Wales.”

Faes added: “However, it’s certainly not the only thing to look out for. Investors also need to measure up the prospects for rental price growth, how active the local market is, and the overall rental yield. Areas that perform well in all of these metrics are winners for property investors.”

The top 10 buy-to-let postcodes (September 2015-August 2016)

Yield Capital gains Rental price growth Transaction volume growth
Luton 4.81% 13.63% 9.58% -4.71%
Stevenage 4.31% 14.78% 8.95% -9.81%
Enfield 4.76% 17.36% 2.21% -4.35%
Northampton 4.87% 8.11% 8.33% 4.38%
Dartford 4.78% 13.02% 7.98% -10.22%
Southend-on-Sea 4.56% 11.79% 5.95% -4.63%
Romford 5.26% 13.47% 2.48% -1.55%
Chelmsford 4.26% 12.15% 5.29% -3.96%
Southall 4.88% 14.01% 3.97% -10.36%
Twickenham 4.48% 15.49% 2.34% -9.16%

btl-index-october-2016-cropped

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