Study Finds The Spanish Property Market Performs Strongly in Europe’s Buy-To-Let Chart

Study Finds The Spanish Property Market Performs Strongly in Europe’s Buy-To-Let

Buy to Let out strips demand in the Costa del Sol which is good news

People looking to become landlords should consider investing outside of the UK if they want to bring in better rental yields. A British investor after good returns from their buy-to-let investment will find it more difficult after the recent hike on stamp duty.

Money transfer company WorldFirst took a look at the situation and saw how poorly British properties performed with rental yields by comparison to the rest of Europe.

This study also discovered that, on the other hand, Spain performed pretty well. Spain came in the top half of nations for bringing in money though rental income.

Going back to the UK though, the study found that a buy-to-let property in the UK would generate an average rental yield of 4.3%. This was enough to rank the UK 21^st out of 29. The bottom country was Sweden where there are strict rental controls. In Sweden a tenant is protected from having their rent hiked and this, along with other restrictions, discourage investment.

It was found that countries in Northern Europe, especially in Scandinavia, didn’t have very high rental returns. The only exception to this was the Netherlands where the average yield is 6.57%, making it the best market for buy-to-let properties.

WorldFirst believe that this is because of the low property costs in the Netherlands, and the healthy balance between the amount of people that own property and the amount of people that want to rent it.

Outside of Spain and the Netherlands other countries for the buy-to-let market were Belgium with yields of 6.47 and Portugal with yields of 6.29%.

Spain came in almost at the exact middle point by taking the rank of 15^th with their average yields of 4.96%. This was the average yield however. In some of the more desirable areas, such as Costa del Sol and Costa Blanca, the yields may be much higher.

These are areas where the rental yields constantly come in at over 5% a year. They also have some very affordable properties for sale and there’s plenty of demand as Spain is one of the most visited countries in Europe. All of this goes together to make Spain a far more attractive country for the buy-to-rent market than these numbers suggest.

Overseas property specialist Simon Conn has himself suggested that when looking at these average yields it is also important to consider the public demand for housing and how easy it is to buy property in that foreign market. For example, the Netherlands may have the best yields but it doesn’t have the same amount of banks willing to lend on a buy-to-let property. Thus Spain, Portugal and Italy actually become the best choices.

In a comment about the study an analyst for WorldFirst, Edward Hardy, said that after the changes to stamp duty British investors may want to look further to find the best deal for high returns on their investment.

Buying property in the Costa del Sol is considered very bullish and the demand for rental property is very strong as many new northern Europeans come to rend first before they buy.