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Strong employment levels have helped to boost rental growth for buy to let investment properties according to new research from lettings platform Howsy.
The latest data on employment levels from the Annual Survey of Hours and Earnings across the UK shows that there has been strong growth in the number of us in work, with 75.2 per cent of the population now employed, up 5.32 per cent in the last year.
During this time rents have also climbed, up 11.9 per cent and Howsy found that on average, a 1 per cent increase in the rate of employment brings a 1.08 per cent increase in rental growth.
The location to have benefitted most from high employment levels leading to higher rents is the city of York. Currently, the city is home to an employment rate of 78.4 per cent, higher than the UK average, while in the last five years rents have increased by 38 per cent.
South Gloucestershire is home to an even higher employment level with 80.7 per cent of the population in work, with rents up 37 per cent in the last five years.
Bristol ranks third with rents climbing 29 per cent over the same period and 77.6 per cent of the population currently in employment.
Midlothian and East Lothian are the best investment option north of the border with rents up 27 per cent and 79.4 per cent and 78.4 per cent of the population in work.
Edinburgh takes sixth place, followed by Bath and Waltham Forest is the first London borough in the top 20 with 78.7 per cent of the population in work, with rents again up 27 per cent in five years.
Central Bedfordshire and Cardiff complete the top 10, with the London boroughs of Lewisham, City of London, and Bexley also making the top 20.
Founder and CEO of Howsy, Calum Brannan, commented: ‘A buy to let investment is a big decision and landlords should base this on far more than the rental yields available. While the highest return will always be top of the list, it should be balanced by other factors as issues with an area, or a tenant can cause a long-term problem that may cost you more money than the property makes.
‘Employment levels can provide a great indicator of the quality of an investment as they usually mean greater ease for finding a reliable tenant and that an area is benefiting from a wider economic uplift.
‘This works both ways as tenants will often be drawn to an area for work and while not every area home to a high employment rate will translate to a higher rental return, an influx of tenant demand will generally see the profitability of your buy to let property increase.’