The latest analysis from Inventory Base, the UK’s leading property inventory specialists, indicates that cooling property values combined with strong rental growth make flats the most lucrative buy-to-let investment for landlords. The study shows that flats have seen the highest annual increase in average yields compared to other property types.

Market Analysis and Yield Comparison
Inventory Base examined current market data on rental values and house prices across different property types to calculate the average yield each offers. The analysis found that flats currently offer the best returns for buy-to-let investors, with an average yield of 6.4% across Britain. Terrace homes follow closely with a 6.3% yield, while semi-detached homes offer a respectable 5.3% return. In contrast, detached properties have an average yield of just 3.9%.

Not only are flats leading in current yields, but they have also shown the strongest performance over the past year. While the average property value for flats has declined by -0.9%, their average monthly rental value has increased by 9.3%. This has resulted in a 0.6% increase in average yield for flats over the last year, outpacing terraced (+0.4%), semi-detached (+0.2%), and detached homes (+0.2%).

Advantages of Investing in Flats
Sián Hemming-Metcalfe at Inventory Base commented on the findings: “Flats not only offer buy-to-let investors a generally more affordable entry point for their initial investment, but they also benefit from a rental market that sees higher tenant demand and, consequently, stronger rental price growth. While the capital appreciation may not match that of other property types, flats come with a host of advantages for investors, including lower running costs and a smoother process when it comes to renting and managing the property.”

Hemming-Metcalfe highlighted the importance of efficiency in property management, noting, “Efficiency is crucial for managing the bottom line, and this is where detailed and accurate property reports become indispensable. These reports document and maintain all aspects of the property, significantly reducing the risk of disputes and costly repairs.”

Implications for Investors
The combination of strong returns, convenience, and time saved, supported by thorough property reports, makes flats an appealing investment option. With the current market conditions favouring rental growth and providing higher yields, flats present a promising opportunity for buy-to-let investors seeking reliable and profitable investments.