Conducted by Bonusetu.com, the research compared the average price of a one-bedroom property in all 76 UK cities and the Isle of Man to the average monthly rental income, revealing the best place to buy a one-bedroom property for the fastest return on your investment.
The results showed that Coventry is the best city to invest in property because it will return your deposit faster than any other UK city. It would take you as little as 14.8 months to ultimately earn back the average deposit of £19.875 with its exceptional rental yield of 12.2%.
Coventry is also known for its vibrant music and arts scene, which attracts a diverse population of young professionals, students, and families. Additionally, Coventry's transport links to major cities such as Birmingham and London could make it an attractive location for people looking to relocate or commute.
The second-best place to invest in the UK if you’re looking for a fast ROI is Birmingham. It takes approximately 15.6 months for the 12.5% rent yield to return your initial deposit.
Londonderry (also known as Derry) in Northern Ireland ranked third as one of the best places to invest for a quick return, with it only taking 17 months to recoup your initial deposit. An important metric for potential investors is that Londonderry has the lowest deposit amount of any area in this study, with a 15% deposit on the average one-bed property only costing £8.437.50.
Southend-On-Sea comes in fourth place. The London-adjacent seaside town has an average rental yield of 9.4% and a return timeline of just over a year and a half.
The central Scotland city of Stirling takes the fifth position. It follows Southend-On-Sea closely behind, taking 19.5 months for the average property rental of £633.75 to return your 15% deposit on a one-bed property. Bradford takes sixth place, with it taking 20.4 months to earn back a 15% deposit in the city. Seventh place goes to Derby where it takes 21 months for the 8.59% rent yield to generate the initial property investment.
In joint eighth place are Armagh and Newry. The deposit for both cities is just over half that of Derby at £11,250, and it also boasts a rental yield above 8%. On top of that, it would only take 21.4 months to earn back your initial deposit. The ninth spot is claimed by Dundee, with the average 15% deposit taking 22.2 months to return your initial investment.
Rounding off the top ten is Milton Keynes. The average ROI period in Milton Keynes is 22.3 months - only three days more than that of Dundee.
The study also found that London and Chester took the longest to see a 15% return, with London having a return period of 201.2 months and Chester having a return period of 88.6 months.
Bonusetu.com also compared these figures to those of a three-bedroom property and discovered that a one-bed property will return a deposit 32.7% faster than a three-bedroom property.
The average three-bedroom property in the UK has a rent of £1,648, takes 55 months to earn back a 15% deposit, and has a rent yield of 3.86%. Average one-bedroom properties in the UK have rents of £957.13, take 37.6 months to earn back a 15% deposit, and have a rent yield of 5.75%.
Speaking on the findings, a spokesperson from Bonusetu.com, said: “This research highlights the importance of evaluating current market conditions when considering investing in the housing market. By analysing the live market data, we can provide valuable insights for motivated property investors who are looking to maximize their return on investment in 2023.”
