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.

Spanish Property Performing Well in Buy-To-Let Charts

Spanish Property Performing Well in Buy-To-Let Charts

People interested in becoming landlords are being advised they should look outside of the UK to bring in the best rental yields from their property investments in Spain.

It’s been made difficult for British landlords to see a good rental yield at home thanks to policies such as the rise in stamp duty for houses bought using a buy-to-let mortgage.

WorldFirst have done a study that shows just how badly rental yields in Britain are when compared to the rest of Europe. This study also saw that Spain was doing quite well overall. Spain was among the top half of nations where people can earn steady incomes through their rental property.

The demand for rental property is outstripping supply

The study showed that properties bought and rented in the UK have rental yields of an average of 4.3%. This put them in 21^st out of 29 countries. Sweden came in at the absolute bottom. Sweden has some strict rental controls put in place to protect tenants from things like sudden rises in rent. This is something that is good for the tenant, but discourages people from investing in property there.

This kind of protectionism can be found across all of northern Europe, in particular the Scandinavian countries, and it left the countries with low rental returns. The exception to the rule proved to be the Netherlands. The Netherlands actually came in first on the list with their 6.57% average yield.

WorldFirst believe that this healthy average yield is because property doesn’t cost as much in the Netherlands. There is also a healthy mix between the amount of people that own property there and the amount of people simply looking to rent property. Belgium also performed well with 6.47% yields, followed by Portugal with 6.29%.

Spain came roughly right in the middle at 15^th with their average yields of 4.96%. There is a lot more to this than meets the eye though. This is the national average. Some areas of Spain, such as Costa Blanca and Costa del Sol, have much higher average yields.

The more popular areas of Spain have rental returns of over 5% per year. Spain is also one of the more attractive countries because of the amount of demand for rental property there and the low prices of housing. Spain is one of the most visited countries in Europe after all.

When thinking about where to invest you need to look at more than just average yields. The public demand for accommodation, along with how difficult it is to buy property in that market, need to be considered. The Netherlands currently has no banks offering buy-to-let mortgages so Spain, Portugal, and Italy become the best choices.

The recent changes to stamp duty in the UK mean that property investors in the UK who want to get the best yields on their investment may wish to look outside of the UK when they add to their profile.

Rental properties in the Costa del Sol have been in high demand for some time and the market is so buoyant that the demand has out stripped supply. Now is a great time to buy a property in Spain and make rental income.