Returns from residential investments in emerging markets were one-and-a-half times higher than those in central London last year.
According to figures compiled by Knight Frank and Crosby Homes and published this week, London sits at the bottom of the table in terms of buy-to-let returns.
Last year, Bristol buy-to-let investments showed the best returns at 26.7%, with a 7% average yield. This compares with 21.9% in Birmingham, 21.1.% in Manchester, 20.4% for Leeds residential and just 17.4% in London.
David Moulton, residential research manager at Knight Frank, said: “We have witnessed a phenomenal surge in demand for quality two-bed executive flats. Landlords in cities such as Leeds and Birmingham have benefited from high returns in excess of 20%, when the gilts market has returned only 3.9% over the past year.
“A growing number of European financial institutions, which had previously looked only at buying in London, are now actively looking to invest in regional cities.
“Some have even set up dedicated investment funds for this purpose. As a safe option, they are spreading the risk between London, established markets such as Leeds, Birmingham or Manchester, and an emerging market, such as Bristol.”
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Returns from buy-to-let investments |
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Bristol market provided returns of 26.7% |
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Gross yield (%) |
Capital growth (%) |
Total return (%) |
Net total return (%) |
|
|
Bristol |
7.0 |
19.7 |
26.7 |
24.2 |
|
Birmingham |
8.0 |
13.9 |
21.9 |
19.4 |
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Manchester |
7.5 |
13.6 |
21.1 |
18.6 |
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Leeds |
8.0 |
12.4 |
20.4 |
17.9 |
|
London |
6.0 |
11.4 |
17.4 |
15.0 |
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*Figures based on buying a two-bedroom apartment. Source: Knight Frank |
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