Buy to let landlords are increasingly looking to the highest yielding areas of the country as a way to maximise their returns and hedge against inflation.  

That’s the view of lettings agency Hamptons, which says that so far this year 71 per cent of investors bought in the 50 per cent highest yielding areas of the country, up from 57 per cent a decade ago.

The agency says this is also one of the reasons why nearly three quarters of London-based landlords bought their buy to lets outside the capital this year, where yields tend to be higher, up from less than a quarter a decade ago.

The North East is the buy to let hotspot where investors purchased 27.7 per cent of homes sold in the first three months of this year, more than twice the share bought by first-time buyers.

It’s also the region that saw the biggest year-on-year rise in buy-to-let purchases.  This may be unsurprising given that it offers the highest gross yields in the country, averaging nine per cent compared to 6.5 per cent across England and Wales.

A staggering figure has emerged for Middlesbrough, which topped the local authority list of buy to let favourites – 58 per cent of homes sold in the area over the last six months were purchased by an investor.  

With an average gross yield of 8.9 per cent, Hamptons says it’s the 13th highest yielding local authority in England and Wales.  While Northern areas dominate the list, six Southern areas made it into the top 15, including London’s most affordable borough, Barking and Dagenham.

As with the owner occupier housing market, a lack of stock available to buy has meant that investors are increasingly having to pay over the asking price. Some 40 per cent have had to pay over the asking price for their new buy to let. 

For the first time since Hamptons’ records began, the average investor is paying over 100 per cent of the asking price for a buy to let in England and Wales.

Via @LandlordToday