Where to buy with a £25,000 deposit?

Aspiring landlords who have a budget of £25,000 and are looking to invest in the buy-to-let sector may want to consider Hartlepool and County Durham.  According to data from the Hamptons estate agency these locations have been identified as offering the highest average gross yields in England and Wales for a 25% deposit and stamp duty.

In Hartlepool, the port town in North East England, an initial investment of £17,030 for a 25% deposit and £2,044 for stamp duty can secure a typical flat with an average gross yield of 11%. The town has a rental hotspot in the historic Headland area, where the average gross yield for landlords is 9.7%. For those who can stretch their budget a little further, a typical terraced house in Hartlepool could be a good option.  An upfront investment of £26,630 and an average gross yield of 9.2%.

County Durham, which is located next to Hartlepool, also offers promising returns for a budget of £25,000. With an average gross yield of 9.2%, landlords can achieve a typical double-digit yield of 10.3% by investing in a cheaper property type.  A landlord would need a combined £28,250 for a typical house in the area, including a deposit and stamp duty. This would provide an average yield of 8.7%.

Paul Gough of We Love Renters, a property management company in Hartlepool, suggests that two or three-bedroom houses for families, old Victorian houses that can be developed into one-bed apartments, and short-term lets for contractors are popular property types in the town.  Gough added that there has been a lot of government money directed towards the wider Teesside region over the past year, and thousands of contractors are in the area, creating a high demand for short-term bedsits.

Attractive Yields

Investors looking for attractive yields in the UK buy-to-let market should consider Hartlepool and County Durham, according to a recent report from Hamptons estate agency. With a deposit budget of just £25,000, landlords can expect an average gross yield of over 9% in both of these areas, outpacing the target income rate of 4% for a typical pension pot in drawdown.

Hartlepool

The town of Hartlepool, located in the North East of England, boasts the highest yields for landlords with a modest investment of £25,000 or less. Cheaper property prices and high tenant demand in the North have driven up rental returns, making the region popular with investors. The port of Hartlepool is a rental hotspot for landlords with an average gross yield of 9.7%, while a typical flat in the area costs £68,130, requiring a deposit of just £17,030 and an additional £2,044 for the stamp duty. The average yield on this investment would be approximately 11%, one of the highest in the country.

County Durham

Investors can also consider nearby County Durham, where the second highest yields for a £25,000 budget can be found. Here, landlords can achieve an average gross yield of 9.2%, or higher if they invest in cheaper property types. The average flat in County Durham costs £76,020, requiring a combined deposit and stamp duty of £21,290. Terraced houses in the area can also yield attractive returns, with an average yield of 8.7%.

According to Paul Gough, of We Love Renters, there are three main tenant demographics that landlords have targeted in recent years.  Families looking for two or three-bedroom houses.  Single male tenants interested in old Victorian houses converted into one-bed apartments.  Contractors in the area for short-term stays.  With the wider Teesside region seeing an influx of government funding, and thousands of contractors in the area, short-term lets are in high demand.

In conclusion, Hartlepool and County Durham are both excellent options for investors looking to make a modest investment of £25,000 or less in the UK buy-to-let market. With attractive yields and high tenant demand, these areas offer the potential for strong returns for savvy landlords willing to navigate the regulatory landscape.