The North West of England typically offers a rental yield of 4.41% for buy-to-let investors, the best across the UK.
Regeneration projects in Northern Powerhouse towns and cities as well as cheaper prices make them highly attractive to investors.
Yorkshire and the Humber is the second-best region for buy-to-let, with typical yields of 4.33%, followed by Scotland, at 4.11%.
The findings come from SevenCapital and Zoopla, who looked to predict the top places to invest in 2022.
Toks Adebiyi, founder and chief executive of property management firm Clooper, said: “Rental yields can change from postcode to postcode, so it is important that landlords conduct thorough research into potential investment outside their current property portfolio locations, to ensure they achieve maximum yields.
“For example, in Manchester, Leeds and Birmingham, certain postcodes are hitting yields of between 6-12%, as property prices are considerably lower than the South East. Currently, the average UK rental yield is sitting at 3.63%, so anything over that amount can be considered a high rental yield area.
“Landlords considering expanding their portfolio into 2022 have the opportunity to acquire highly profitable properties in 2022, despite looming interest rate rises and potential issues with finance. The good news is that there is an ever-increasing demand for rental properties across the UK.”
Almost 40% of landlords have reported increasing tenant demand throughout the past three months, the most since 2016.
It is expected that during 2022, the Midlands and the North of England will show the strongest price growth, mainly driven by their greater capacity for growth.
UK house prices have continued to rise strongly throughout this year, increasing by 5.6% in the first six months and driven by elevated levels of demand. It’s expected that by the end of the year, the UK will see prices rise by a total of 9.0%.