Landlords in Bradford and Leeds are enjoying the UK's best rental yields, with those in Exeter seeing the largest annual growth last year.
Yields have increased by as much as 2.5% in the past 12 months, according to Sirius Property Finance, which reports that as rent values outperform house prices, the current average now stands at 4.08%.
Bradford's BD1 postcode region is generating a healthy 11.06% while the Leeds LS2 postcode currently yields an average of 10.05% and Manchester's M14 region isn't far behind with 9.41%.
Exeter's EX4 region tops the annual yield growth chart with an increase of 2.56% in the past year, bringing the current average to 6.52%, followed by Leeds' LS2 (up 2.33%) and Nottingham's NG7 (up 2.10%).
In the DD2 district of Dundee, yields have grown by 2.03% bringing the average to 6.11%, while Manchester's M11 annual growth of 1.98% puts it at 7.63%. Strong growth has also been witnessed in Aberdeen's AB24 (1.77%), Salford's M7 (1.66%), York's YO1 (1.60%), Hull's HU1 (1.58%), and Wokingham's RG10 (1.56%).
These areas of strong growth are being helped by house price performance being overshadowed by rent values, according to Sirius Property Finance - a prime example of this being Exeter's EX4 postcode where prices are up 12.8% in the past year and rent is up 85.6%.
Head of corporate partnerships at Sirius, Kimberley Gates (pictured), says it's important to acknowledge that while mortgage rate hikes and the cost-of-living crisis have helped generate higher yields, landlords are also tackling increased costs.
'These higher portfolio running costs negate some of the yield increases we're seeing and should be carefully considered when thinking about investing in new properties,'� she warns.