A new analysis of Zoopla data shows the lowest-yielding locations in the UK for buy to let landlords.
Cambridge has the lowest average gross yield across major cities at 4.7%, despite monthly rents costing more than £500 less than in London on average.
London headlines the list, with gross yields of 5.1% on average – the third-lowest in the UK.
Areas with higher rental yields in the London region, however, include Barking and Dagenham (6.22%), Newham (6%), and Bexley (5.8%).
Sunderland has the highest average gross yield of 9.3% – a rate that is also 1% higher than in any other UK city. Rents in Sunderland (£659) are less than half of London.
Major UK cities such as Glasgow, Liverpool, and Newcastle also sneak into the top 10, and this reflects a pattern of Scottish and Northern English dominance in this ranking.
In fact, the North East posts the top regional yield, at 7.9%. Scotland (7.9%) and the North West follow in 2nd and 3rd respectively.
Said Derzi, property advisor at Landlord Resource, says: “Before basing your buying preferences on a yield figure, you should cross-check at least two independent sources – this could include a housing portal and a lending tracker.
“While the latest data suggests that buy-to-let opportunity in the North is great for a return on investment, it will cost you growth as a result.
“Typically, housing prices in Southern England have risen nearly twice as fast in the past decade as compared with northern counterparts.
“For those looking to pick an area imminently, they should note that city-level rankings are too coarse to buy on.”
| Rank | City | Average Monthly Rent | Average Price | Average Gross Rental Yield |
| 1 | Cambridge | £1,600 | £408,709 | 4.7% |
| 2 | Oxford | £1,778 | £424,755 | 5% |
| 3 | London | £2,119 | £494,542 | 5.1% |
| 4 | York | £1,150 | £262,055 | 5.3% |
| 5 | Southend | £1,225 | £268,662 | 5.5% |
| 5 | Brighton | £1,648 | £358,137 | 5.5% |
| 5 | Reading | £1,429 | £309,749 | 5.5% |
| 8 | Bristol | £1,394 | £300,381 | 5.6% |
| 9 | Milton Keynes | £1,271 | £268,744 | 5.7% |
| 10 | Worthing | £1,204 | £250,527 | 5.8% |