When researching into the best areas in Milton Keynes to invest in a property to let, you will be keen to find out the sort of rental yield you can expect to enjoy in return.
A high rental yield ensures that your rental income covers the running costs of the property, from mortgage repayments to wear and tear.
What is rental yield and how is it calculated?
A rental yield refers to the value of rent you can expect to receive from your property in a year.
To cover all necessary expenses while allowing you to make a reasonable return on your investment, anywhere between 4-8% is considered a good rental yield.
The rental yield is calculated by dividing your annual rental income by your total investment, then multiplying this by 100. As an example, if you buy a house for £250,000 and rent it for £950 per month, your rental yield is 4.5%.
What is the average rental yield in Milton Keynes?
Yields fluctuate from estate to estate. In Central Milton Keynes, the average yield is 5% (before the service charge is deducted). Some areas see investors making significant gains, so specific location and property choice make a big difference when looking to invest in Milton Keynes.
What is a good rental yield in Milton Keynes?
Milton Keynes rental market is huge and there is always a demand for property. However, a high level of properties at a high market price in Milton Keynes means that buy to let property in the area must work hard to return a profit. For this reason, a good rental yield in Milton Keynes is between 5-6%.
Which areas have the best rental yields in Milton Keynes?
Where is the best place in Milton Keynes to invest at the moment? We’ve put together a list of the best rental yield areas in Milton Keynes:
Walnut Tree
Average rental yield: 4.2%
Average house price: £356,734
The majority of sales in Walnut Tree during the last year were detached properties, selling for an average price of £508,533. Terraced properties sold for an average of £216,194, with semi-detached properties fetching £240,100. Overall, sold prices in Walnut Tree over the last year were 59% up on the previous year and 40% up on the 2018 peak of £254,911. Walnut Tree offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, the Open University, Red Bull Racing and other well know household names are located nearby.
Kents Hill
Average rental yield: 4.5%
Average house price: £340,353
The majority of sales in Kents Hill during the last year were detached properties, selling for an average price of £458,375. Semi-detached properties sold for an average of £231,125, with terraced properties fetching £270,000. Overall, sold prices in Kents Hill over the last year were 13% up on the previous year and 6% up on the 2016 peak of £320,469. Kents Hill offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, the Open University, the M1 motorway, the Kingston Centre and other well-known names are located nearby.
Monkston
Average rental yield: 5.3%
Average house price: £289,451
The majority of sales in Monkston during the last year were semi-detached properties, selling for an average price of £264,885. Detached properties sold for an average of £377,272, with terraced properties fetching £181,674. Overall, sold prices in Monkston over the last year were 3% up on the previous year and 11% down on the 2018 peak of £326,318. Monkston offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, the Open University, the M1 motorway, the Kingston Centre and other well-known names are located nearby.
Middleton
Average rental yield: 4.5%
Average house price: £427,678
The majority of sales in Middleton during the last year were detached properties, selling for an average price of £612,692. Flats sold for an average of £195,928, with terraced properties fetching £293,125. Overall, sold prices in Middleton over the last year were 4% down on the previous year and 3% up on the 2018 peak of £415,931. Middleton offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, the Open University, the M1 motorway, the Kingston Centre and other well-known names are located nearby.
Broughton/Broughton Gate
Average rental yield: 5.9%
Average house price: £305,620
The majority of sales in Broughton during the last year were detached properties, selling for an average price of £470,936. Terraced properties sold for an average of £270,742, with semi-detached properties fetching £299,215. Overall, sold prices in Broughton over the last year were similar to the previous year and 6% down on the 2018 peak of £326,590. Broughton/Broughton Gate is a fairly new and large development in Milton Keynes, which keeps expanding, there are a high number of apartments on the development, so don’t forget to include the service charge as part of your costings when looking at investments options as this can eat into your profit! However, the area is a great investment as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, the Open University, the M1 motorway, the Kingston Centre and other well-known names are located nearby.
Willen
Average rental yield: 3.8%
Average house price: £376,786
The majority of sales in Willen during the last year were detached properties, selling for an average price of £509,571. Semi-detached properties sold for an average of £259,200, with terraced properties fetching £280,000. Overall, sold prices in Willen over the last year were 12% up on the previous year and similar to the 2018 peak of £377,370. Willen is a long-term investment with property value increasing over time, close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, Mercedes-Benz, Scania Head Office, Volkswagen and other well-known household names are located nearby.
Willen Park
Average rental yield: 4%
Average house price: £293,192
The majority of sales in Willen Park during the last year were semi-detached properties, selling for an average price of £285,750. Detached properties sold for an average of £329,500, with flats fetching £207,500. Overall, sold prices in Willen Park over the last year were 2% down on the previous year and 4% down on the 2017 peak of £304,020. Willen Park is a long-term investment with property value increasing over time, close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, Mercedes-Benz, Scania Head Office, Volkswagen and other well-known household names are located nearby.
Pennyland
Average rental yield: 4.7%
Average house price: £329,458
The majority of sales in Pennyland during the last year were detached properties, selling for an average price of £335,083. Semi-detached properties sold for an average of £333,600, with terraced properties fetching £275,000. Overall, sold prices in Pennyland over the last year were 12% up on the previous year and 34% up on the 2016 peak of £246,500. Pennyland is an older estate in Milton Keynes boasting slightly bigger rooms than the new builds in Milton Keynes. This area still has a demand for families looking for long term lets. For employment, Linford Wood is a stone's throw away where there are several companies based, along with easy access to the M1 motorway.
Giffard Park
Average rental yield: 4.6%
Average house price: £351,279
The majority of sales in Giffard Park during the last year were detached properties, selling for an average price of £495,654. Terraced properties sold for an average of £185,228, with semi-detached properties fetching £299,250. Overall, sold prices in Giffard Park over the last year were 21% up on the previous year and 14% up on the 2018 peak of £307,794. Giffard Park offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, Mercedes-Benz, Scania Head Office, Volkswagen and other well-known household names are located nearby.
Newport Pagnell
Average rental yield: 5.2%
Average house price: £321,172
The majority of sales in Newport Pagnell during the last year were semi-detached properties, selling for an average price of £312,919. Detached properties sold for an average of £433,104, with terraced properties fetching £250,153. Overall, sold prices in Newport Pagnell over the last year were 12% up on the previous year and 6% up on the 2018 peak of £302,875. With Newport Pagnell being an old market town, which offers a variety of properties available. Newport Pagnell offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, Aston Martin, Interchange Park, where there are a number of companies based, along with easy access to M1 Motor Way.
Two Mile Ash
Average rental yield: 4.6%
Average house price: £358,206
The majority of sales in Two Mile Ash during the last year were detached properties, selling for an average price of £458,530. Semi-detached properties sold for an average of £285,446, with terraced properties fetching £80,562. Overall, sold prices in Two Mile Ash over the last year were 37% up on the previous year and 34% up on the 2018 peak of £267,539. Two Mile Ash offers a great location to invest in as the location is close to several good schools, which will appeal to families, as they tend to stay long term once they’ve settled their children into school. For employment, Kiln Farm is a stone's throw away where there are a number of companies based, along with easy access to the A5 dual carriageway.
In Summary
In the age of comparison websites, finding out the rent prices for like-for-like properties is easier than ever and at your fingertips. Therefore, if you have to charge excessive amounts of money to make a return on investment, then property you’re looking at might not be the best one for you and your investment model.
The recent stamp duty holiday – on the first £500,000 of purchases until 31st March – was put in place as a bid to stimulate the property market in the wake of Coronavirus, and has reassured investors that there is still money to be made in the Buy to Let sector.
If you’re looking for the perfect location to Buy to Let in Milton Keynes, calculating the rental yield will give you a great idea of whether it will be a worthwhile investment.
