New research by lettings management platform Howsy has looked at which property makes the best investment for buy-to-let landlords when it comes to current rental yields, and the result is clear: two-bed properties offer the best rate of return.

Howsy looked at current rental yields across one-bed, two-bed, three-bed and four-bed+ properties based on the average cost of buying each property type and the average rent they command.

The research showed that across England, two-bed properties make by far the best investment option, with the average yield at 4.8% compared to 4.1% for one bed, 4.5% for a three-bed and 3.6% for properties with four or more bedrooms

It also seems that investing in a two-bed up north is a better bet to maximise those rental yields, with the North East seeing the highest average yields for a two-bed property at 5.5%.

The North West is the next best option, with the average rental yield for a two-bed at 5.3%, followed by Yorkshire and the Humber (5.2%) and the East and West Midlands at 5.1% and 5%, respectively.

The average rental yield for a two-bed in the capital currently sits at 4.5%, but interestingly, London is the only region where a two-bed doesn’t offer the best yields across all room sizes.

This title is reserved for the lowly one bed where rental yields on this property size hit 4.6%.

If you’re in the market for a three-bed, then the North West is the most lucrative region with yields at 4.9%, while Yorkshire and the Humber is your best bet for a four-bed or above with an average rental yield of 4.3%.

Founder and CEO of Howsy, Calum Brannan, commented, “As a landlord, maximising the profitability of your buy-to-let investment is as vital now as it has ever been, and property size and type are as important as location when it comes to doing so.

While the two-bed property is traditionally the most popular amongst tenants and landlords due to the additional size without going overboard on costs, there is a slight regional variation in the capital.

This is, of course, due to the high rents you can secure in London even on a one-bed and the overwhelming demand for properties that have seen even the smallest ‘studio flats’ rent for above-average prices.”

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