Rental yields have remained largely flat across the UK with an average increase of just 0.1 percentage points year on year, according to calculations by Sourced Capital.

The peer-to-peer investment platform found that in England, yields dipped by -0.1 percentage points to 4.1 per cent while in London they fell by -0.2 points to level with the national average.

However, the North East has seen an increase of 0.12 points to 5.09 per cent, while in some localities there was a sharper rise in yields.

Corby has seen an uplift of 0.7 points to 4.52 per cent, while Charnwood, Newcastle and Exeter have seen a jump of 0.5 points to 3.53 per cent, 5.6 per cent and 5.52 per cent respectively.  

Harlow in Essex to saw a rise of 0.4 points to  4.51 per cent and the Orkney Islands saw an increase of almost as much to 5.17 per cent, along with Ealing which had the largest increase of all London boroughs at 0.35 points to reach 4.07 per cent.

Glasgow saw a marginal decline but its average yield of 7.87 per cent remains the strongest of any area in the UK.

Inverclyde, West Dunbartonshire, Midlothian and East Ayrshire also remain among the most profitable pockets with yields above or close to 7 per cent, while outside of Scotland, Burnley, Belfast and Blackpool also rank highly with yields of 6 per cent or more.

Sourced Capital managing director Stephen Moss says: “Turning a profit in the buy-to-let sector remains a tough ask with a number of government changes denting profitability and yields remaining largely flat.”

He says that Covid-19 has created additional hurdles such as rental arrears and longer void periods.

He adds: “However, that is not to say that a buy-to-let property will not make a great investment should you place your money in the right pockets of the market. 

“Buy-to-let returns are based on fine margins and so an annual increase of 0.7 percentage points is not as insignificant as it may seem.”