Colchester tops LendInvest's BTL index

Colchester has secured the number one spot in the latest LendInvest buy-to-let (BTL) index.

The index revealed that the Essex town had topped the table after holding the number two spot since September 2017.

Published quarterly, the index – which ranks 105 postcode areas around England and Wales based on a combination of four metrics: capital value growth, transaction volumes, rental yield and rental price growth – found that the Midlands had begun climbing the table, with Northampton second, Leicester in third and Birmingham occupying fifth spot.

Meanwhile, London commuter towns Dartford (43rd), Romford (14th) and St Albans (73rd) – which had previously been high flyers – had all dropped down the table.

The top 10 buy-to-let postcodes:

The bottom 10 buy-to-let postcodes:

The latest report included a special supplement investigating how the same postcode areas were faring amid a nationwide slowdown in house price growth.

The Midlands has been largely unaffected by such a slowdown, with three of its largest cities breaking into the top five.

The South West of England has also remained unscathed by house price growth slowdown, with Truro registering a 73% increase.

However, four commuter towns that surround London have experienced more than a 50% slowdown in house price growth, resulting in them dropping down the index.

Ian Boden, sales director at LendInvest (pictured above), said that it didn’t subscribe to the idea of a mass house price growth slowdown throughout the country.

“Instead, we wanted the index to show us where the slowdown is hitting hardest, and where the opportunities continue to abound for UK landlords and property investors alike.

“Predictions for the overall growth of the housing market remain positive for the year ahead, but this quarter’s index indicates that house price growth slowdown is impacting on different regions to different degrees.

“There are reasons to be cheerful in many places around the country.

“Looking at the South West and the Midlands in particular, we can see modest slowdown occurring that’ll keep market activity buoyant.”

Ian continued: “Striking the right balance when it comes to making property investment decisions is crucial, however, the current limitations in house price growth mean fewer opportunities in the market to perform a traditional ‘flip’ of a property to get a return.

“We can expect to see investors taking longer-term positions in property as they look to yields and rental price growth as valuable metrics in the short term to determine the profitability of an asset.

“The best way for investors to take advantage of the volatility in the rental market is to seek out buy-to-let opportunities.”

Areas most affected by price growth slowdown:

Areas least affected by price growth slowdown:

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