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Leave London to boost BTL yields, says Charcol

National mortgage broker Charcol is warning that some buy-to-let investors should quit London and look to invest in properties in the regions because of falling rental yields.

The warning comes as figures from its sister firm Bradford & Bingley Letting Agents reveal the North-west of England has seen a 1 per cent increase in average rental yields over the past year to 11 per cent while returns in the South-east have fallen to as low as 3 per cent.

It says this shows the buy-to-let market is not all doom and gloom if people look to diversify to areas which have recently experienced a property boom.

Charcol senior technical manager Ray Boulger says the firm has clients who bought properties to rent in London a few years ago but are now having difficulty with maintaining rental income and finding new tenants.

He says it tends to be experienced landlords with more than one property who see the commercial sense in switching their portfolio to less saturated areas while more amateur investor will sell and leave buy-to-let.

Boulger says: “In the last three to four months, we have had a few people doing this – they take the profits made in London and invest elsewhere where the market is not oversupplied and yields are higher. It is not a flood from London and it helps landlords who remain there.”

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