"While the rental yield plays a central role in your returns, it is determined primarily by location"
- Mark Michaelides - Molo
UK house prices have dropped by 5.3% since September 2022, with rising interest rates causing prices to fall in every region of the country. That being said, the average house price across the UK remains high at £286,500, which means buying a property for anything under this amount may be considered a bargain.
Finding properties that offer the highest returns for the lowest initial price can be difficult, but there are affordable options available if you know where to look.
The North East of England is the best region in the country to invest in properties below £100k
According to Molo's research, four of the top five locations for investing in properties priced below £100k are found in the North East of England, making this the best region to invest in an affordable buy-to-let property. The region offers low average property prices with high rental yields. It is also well-connected, offering efficient routes to both Scotland and London, making it an attractive option for renters.
The best location of all is Hartlepool and Stockton-on-Tees, where the average house price is the cheapest across England and Wales at just under £86k and offers an attractive rental yield of 7.90%. Combined with an average monthly rental income of £591 and vibrant local culture, these factors make Hartlepool and Stockton-on-Tees a top pick for buy-to-let investors.
Another area in the North East, South Teesside, comes in second with an average house price of £96,500 and an appealing rental yield of 7.66%. Low property prices combined with the average of £646 per month in rental income means high yields and affordable opportunities for investors.
Lancaster and Wyre in the North West come next with average house prices of £93k and a gross rental yield of 7.11%, followed by Darlington (£85,370.33 / 6.83%) and Durham (£94,055.28 / 6.67%) in the North East.
Vice President of Strategy at Molo, Mark Michaelides comments: “While the rental yield plays a central role in your returns, it is determined primarily by location. Landlords looking for additional ways to maximise rental income may consider home improvements, such as a new bathroom, kitchen or extension, which can increase both the rental potential and overall value.
"Making your buy-to-let more energy efficient is another way to boost rental income, as it may make the property more desirable to tenants due to lower energy bills.”
