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Should buy-to-let investors ‘go Dutch’?

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16/05/2016
The Netherlands is revealed as Europe’s top buy-to-let property hotspot
Should buy-to-let investors ‘go Dutch’?

The Netherlands is the best location in the EU for buy-to-let investments, as it offers the highest rental yields in the region, according to new research by World First.

The international currency business said that Belgium and Portugal are also attractive locations for buy-to-let investments, taking second and third respectively in the EU buy-to-let league table.

With an average rental yield of 6.57%, the Netherlands is the most lucrative country for buy-to-let investments within the EU, due largely to the relatively low price of buying property. The average one bedroom apartment costs just over £110,000 and a three bedroom house costs around £211,000. In the UK, the average price of a one-bedroom apartment is £179,000 and a three-bedroom house is £343,000.

At the other end of the spectrum are Sweden, France and Italy, which offer the lowest returns on buy-to-let investments. Sweden has yields lower than 3% (2.88%) due to rental controls and a market that favours tenants.

Urban return

The research also revealed differences when investing in buy-to-lets in city centres compared to suburbs and rural areas. For buy-to-let in city centres, Belgium takes the lead with yields of 6.54%. This is partly due to the dominance of Brussels as an expat destination for those working at or within the European Parliament, European Commission, Council of the European Union, and the European Council.

For properties outside the city centre, the Netherlands again has highest yields (6.78%), closely followed by Turkey (6.65%) and Portugal (6.57%).

Edward Hardy, market analyst at World First said: “With the recent changes to stamp duty tax for buy-to-let landlords, UK property investors looking to add to their portfolio might want to consider looking further afield to get the best returns.

“Our research shows that within the EU, the Netherlands, with relatively affordable property prices, holds the highest level of returns in Europe. On the other hand, countries that have policies in place to regulate rental prices like Sweden and Germany offer relatively low yields for investors.”

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  • A few big issues – 1. It is always very unwise to invest in property at a distance. Not only would you have to give your agent trust, with little or no checking. You wont know the legislation in brussels. 2. Difficult to obtain finance as a foreign investor. 3. You can get better yields “up north” in England than Brussels.

  • Dee Wellace

    the Netherlands has also the rent control so the yield could be lower and the law is in favour of the tenants . As Adam says you need to know the legislation but if you do I agree Amsterdam is the best place although I still would start to invest up north with 12% minimum net yield. Now that s proper passive income

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