Top 10 seaside towns for buy to let investors

Blackpool is the hottest seaside town for buy-to-let investors, according to a survey by a high street bank.

The northern resort offers average rental yields of 7.81% on an average property price of £75,943 and average monthly rent of £494.

Blackpool also performed well in the overall top 50 list, the HSBC study shows, highlighting that seaside resorts are lucrative for landlords.

In fact, 17 of the top 50 buy to let hot spots are coastal towns and cities, a fact attributed to holiday rentals and the influx of seasonal workers looking for rental accommodation each year.

For the top 10 seaside hotspots, the other nine are in the south.

Bournemouth was second with a rental yield of 5.81% from average £825/month rent on a £170,493 property, followed by Brighton and Hove with a 5.48% yield from £1,049/month rent on a £229,622 property.

Property prices tend to be high in these areas, but rents are also above average and demand remains steady, so investors have a good potential for strong yields.

However, the Isles of Scilly may be a statistical anomaly. The total population is just 2,203 and there are under 300 private rented homes on the isles according to the 2011 census. The pickings may be rich but the market is limited.

Of the top 50 areas, nearly half offer yields of more than 5%, this is far greater than the interest earned from traditional savings.

But Peter Dockar, head of mortgages at HSBC, warns that landlords must carry out their research before investing as the popular locations do not always offer the best returns. Desirable location, achievable rent and expected returns must all be considered and balanced when choosing a rental property, and investors have many other figures and issues to bear in mind as well.
Top 10 Seaside BTL Hotspots by Rental Yield

Source: HSBC April 2013