Month: October 2022

It’s common for landlords with larger properties (i.e. three or more bedrooms) to rent out the whole house to a single person, family or group of tenants, rather than letting rooms on an individual basis. But is this really the most profitable option?

CIA Landlords Insurance conducted a study to find out where in the UK landlords can make the most money from renting an entire property vs letting individual rooms, as well as where tenants can find the best deals on rent. We compared average rent costs for 3-bed properties and single rooms in a property across the top 30 most populated cities in the UK, revealing which UK cities – and which rental strategies – offer the best value for both landlords and tenants.

The most profitable UK cities for landlords to rent out the whole property

By calculating the average rent price of 3-bed properties in different cities around the UK, we were able to reveal which cities allow landlords to make the most profit from letting an entire property.

• London

Unsurprisingly, London ranks as the number one most profitable location for landlords who choose to rent out their entire property to multiple tenants.

High rental prices in the UK capital mean that the average monthly cost of a 3-bed property is £5,078, which works out as £1,693 per room. This is more than double the cost of the second most expensive city, Edinburgh, making London by far the most profitable location for landlords looking to bring in the highest earnings.

2. Edinburgh

Rental prices in Edinburgh are significantly lower than in London, but landlords still stand to make a very decent profit in the Scottish capital.

The average cost of renting a 3-bed property in Edinburgh is £2,511 per month, which equates to £837 for each room. This cost per room is almost the same price as renting a whole property in the cheapest location, Stoke-on-Trent, where average monthly rent is just £842.

3. Bristol 

The UK’s third most profitable city for landlords is Bristol, where rent is lower than in London and Edinburgh but still relatively pricey. The average monthly rent for a 3-bed property in Bristol is just under £2,000, or around £659 per room when split between tenants.

Glasgow and Milton Keynes round out the top five, where landlords stand to make on average £1,703 and £1,623 per month respectively for a 3-bed property.

Top 5 most profitable UK cities for landlords to rent out a 3-bed property

The most profitable cities for landlords to rent rooms individually

Landlords may choose to let rooms individually rather than rent out a whole property, but where can they make the most profit from this? To find out, we calculated the average cost per month of renting a room in cities around the UK.

• London

London was once again revealed as the most profitable city for landlords, with an average monthly cost of £972 to rent one room in England’s capital.

This is more than double the price of renting a room in the UK’s cheapest location, Preston, where landlords make on average just £440 per month from letting out an individual room.

2. Bristol

Bristol, which ranked as the third most profitable city for landlords to let whole properties, is actually the second most profitable for letting individual rooms.

The average monthly rent for a single room in Bristol is £710, which is around £51 more expensive than the price per room when renting out a whole property (£659). This means landlords in Bristol stand to make more money by renting out rooms on an individual basis, rather than letting a whole property.

3. Kingston-upon-Hull

Kingston-upon-Hull in the north of England is the third most profitable location for landlords to rent out rooms individually. The average monthly rent for a single room in Hull is £697, which is only a little less than the average cost of renting an entire 3-bed property (£862).

Edinburgh and Milton Keynes rank fourth and fifth, with a single room costing £663 and £635 respectively in these cities.

Top 5 most profitable UK cities for landlords to rent rooms individually

The cheapest UK cities to rent a 3-bed property

As well as investigating where landlords can make the most profit from renting a whole property, we’ve revealed where tenants can find the cheapest deals on rent for a 3-bed property.

• Stoke-on-Trent

Stoke-on-Trent is the cheapest city in the UK to rent a whole 3-bed property, making it the ideal location for tenants looking to save on rent.

The average rent price for a 3-bedroom in Stoke is £843 per month, which is over £4,000 cheaper than the monthly cost of renting the same-sized property in London (£5,078). This works out as just £281 per room.

2. Kingston-upon-Hull

Kingston-upon-Hull, which was the third most expensive location to rent a single room (£697), is actually the second cheapest city to rent an entire 3-bed property.

The average monthly rental cost for a 3-bedroom property in Hull is £862, which equates to £287 per room. This is over £400 cheaper than the cost to rent a single room in a property, so tenants in this city could stand to save money by renting an entire property as a group and splitting the cost.

3. Sunderland

The third cheapest city for tenants to rent a 3-bedroom property is Sunderland, just south of Newcastle. The average price to rent a 3-bed in this city is £968, working out as £323 per room. This is cheaper than the average monthly cost of renting a single room (£589).

Bradford ranks fourth with a monthly cost of £983, followed by Derby in fifth with a cost of £1,069.

Top 5 cheapest UK cities to rent a 3-bed property

The cheapest cities for tenants to rent by the room

We’ve calculated the average cost to rent a single room in a property in cities around the UK to reveal where tenants can find the cheapest deals.

• Preston

Preston is the cheapest city in the UK for tenants wanting to rent by the room. The average monthly rent for a single room in a property here is £439.60, which is over £500 cheaper than the cost of a single room in the most expensive city, London (£972).

2. Liverpool

The second cheapest city for tenants to rent by the room is Liverpool, where the average monthly price of an individual room is £439.86 – just marginally more expensive than Preston.

3. Bradford 

Bradford is the third best location for tenants looking to save some money on a single room’s rent. The average cost of renting an individual room in this northern city is £459 per month.

Stoke-on-Trent (the cheapest city to rent an entire 3-bed property) is the fourth cheapest city to rent a single room at £463 per month on average, followed by Aberdeen in fifth (£466).

Top 5 cheapest UK cities to rent a single room in a property

Cities where renting the entire property is the most profitable renting strategy for landlords

For landlords looking to maximise their profits, it’s important to know which is the more cost-effective option: renting out their entire property, or renting rooms individually.

To discover the cities where landlords stand to make the most profit from renting out a whole property, we’ve compared the cost of renting a 3-bed property with the cost of renting a single room in cities around the UK. Our analysis revealed just four cities where this is the most profitable rental strategy:

• London

London ranked as the most profitable city overall for landlords, both to let a whole property and to let rooms individually. However, our analysis revealed that to truly maximise their profits, landlords are better off renting out an entire property.

The average monthly cost of renting a 3-bed in London works out as £1,693 per room, whereas the average cost of renting a single room in a property is just £972 per month. This means landlords could earn on average an extra £721 per room (or £2,163 overall) by choosing to let their entire property.

2. Edinburgh

Edinburgh is the second most profitable location for landlords to rent out an entire property instead of letting individual rooms.

The average monthly rent for a 3-bed in Scotland’s capital works out at a cost of £837 per room, which is £174 more than the average cost of renting a single room in a property (£663). This means landlords could earn on average an additional £522 per month by letting their whole property.

3. Aberdeen

Aberdeen, another city in Scotland, ranks third. The average monthly cost to rent a 3-bed in Aberdeen works out at £517 per room; meanwhile, the average cost to rent a single room is £466.

This means landlords could earn an extra £153 per month on average by letting out an entire property rather than letting rooms to individual tenants.

4. Manchester 

Manchester is the fourth and final city where landlords can make the most money by renting out an entire property.

The average monthly price of renting a 3-bed in Manchester works out at £518 per room, which is £16 more expensive than the average cost of renting a single room in a property (£502). This price difference could earn landlords an additional £48 per month on average.

Cities where renting out an entire property is more profitable than renting individual rooms

Cities where landlords can maximise profits by renting rooms individually

We found that, aside from the four cities discussed above, renting out rooms on an individual basis is the most profitable option for landlords.

We’ve ranked cities based on the cost difference between renting a whole property and renting a single room, to reveal where landlords can make the most extra cash from this rental strategy.

• Kingston-upon-Hull

Kingston-upon-Hull offers landlords the opportunity to make the most additional profit from renting out properties by the room. While the average monthly cost of renting an entire 3-bed property in Hull works out as £287 per room, the average cost of renting a single room is £697 per month, which is over £400 more.

This means landlords could earn up to £1,230 more per month by renting out rooms on an individual basis, adding up to an additional £14,700 per year.

2. Sunderland

In Sunderland, the average cost of renting a single room in a property is £590 per month, which is £267 more per room than the average monthly cost of renting a 3-bed property (£323). Consequently, landlords in Sunderland could make an extra £801 per month by using this rental strategy, adding up to an additional £9,612 per year.

3. Nottingham

Nottingham is the third best location for landlords to maximise profits by renting out individual rooms. The average monthly rent for a 3-bed property works out at £366 per room, whereas the average cost of a single room is £581 per month.

This additional £215 per room adds up to an extra £645 a month, or £7,740 per year.

Top 10 cities where landlords can make the most profit by renting rooms out individually

Pros and cons of renting by the room

For landlords, renting property by the room generally offers a higher return on investment and is, therefore, a more profitable rental strategy overall. However, there are some potential disadvantages:

• Unstable income due to high tenant turnover: Renting by the room is often a temporary arrangement for tenants, and contracts are often shorter term (6-12 months). This means income may be unstable as tenants move out and leave rooms unoccupied.

• Potentially more work involved: Renting on an individual basis means you will have to deal with each tenant individually, write up multiple individual contracts, and respond to individual complaints. This can be a lot of work.

• Higher expenses: More tenants in a property may lead to higher expenses, such as needing to spend more on repairs. However, good landlord insurance may help with these costs.

For tenants, renting by the room is also generally a more cost-effective option as it means you don’t need to pay the cost of an entire property. It’s also ideal for tenants looking for a temporary living arrangement.

However, renting by the room means you may live with strangers and have less control over your living situation. This could lead to conflicts or awkward situations.

Pros and cons of renting a whole property

Renting out an entire property is generally a less profitable strategy for landlords, but this does depend on location. It may also be more favourable for landlords wanting to guarantee a more stable, steady income, and it usually involves less work overall.

As for tenants, choosing to rent a whole property is often more expensive than renting a single room and may also be a bigger commitment thanks to generally longer-term contracts. However, it also allows you more control over your living situation and means you don’t have to worry about sharing your space with multiple other tenants.

Overall, there are pros and cons to each rental option for both landlords and tenants. It’s important to carefully consider your options, and choose the right strategy.

Methodology

A seed list of 30 cities across the UK was compiled based on population, selecting the 30 cities with the largest number of inhabitants.

We gathered average prices for a 3-bedroom home based on Rightmove listings in every city to establish a base price. This number was divided by 3 to determine the hypothetical price per room if a home were to be bought.

Additionally, we took prices of rooms for rent on SpareRoom in each city, to determine how much renters pay on average for a single room.

We then divided the price per room of a bought property by the price of a single room for rent, to find out the difference between the two in price and percentage.

Sources

• worldpopulationreview.com

• rightmove.co.uk/property-to-rent.html

• https://www.spareroom.co.uk/

Whether it be a place to grow your own vegetables or a patch of grass for your kids to play football, having a garden comes with an abundance of benefits. Research has shown that garden space can boost the sale value of a property by at least 20%. But what about rental value? And where in the country is this value the highest?

CIA Landlords Insurance has researched purchase and rental prices for properties with and without a garden around the UK to discover which cities give the highest value to personal green space. We’ve also taken a look at the average cost of garden upkeep, revealing the cheapest and most expensive locations to live with a garden.

The cheapest cities to live in with a garden in the UK

• Plymouth

Residents of Plymouth pay the least money overall for their own private green space, including the cost of the property and garden upkeep.

While the average cost of buying a property with a garden is around £37,620 more expensive than buying one without in Plymouth, rent prices are about the same. The average property rent is £879 per month, whereas the average rent for a property with a garden is slightly cheaper at £875.

Total gardening costs are also lower in Plymouth than anywhere else in the country, costing an average of £634 to carry out tasks such as weeding, mowing the lawn and general garden maintenance.

• Kingston-upon-Hull

Kingston-upon-Hull ranks as the second cheapest location for Brits to live with a garden. The average upkeep costs are slightly higher here at £711, but this is still one of the lowest prices for garden maintenance in the UK.

Plus, a property with a garden costs on average just £3,840 more than one without in Kingston-upon-Hull, making it one of the cheapest places to purchase a property with a garden.

• Bradford

Bradford comes in third place, with overall higher property prices for both renters and buyers looking for a home with a garden. It costs an additional £14,046 to buy a property with a garden in this northern city, and an extra £115.70 per month to rent.

However, Bradford also offers the second lowest average gardening cost after Plymouth (£707), which makes up for the elevated property prices.

• Leeds

Leeds is the fourth cheapest city to live in with a garden in the UK, with gardening costs in this city the same as in Kingston-upon-Hull (£711). However, the cost of purchasing a home with a garden is much higher in Leeds. Buyers can expect to pay around £30,770 more for a property with its own garden, which is the highest price hike of all the top five cities.

Rent, however, is not quite as affected; an extra £54.96 per month is added to average rent costs for properties with a garden, which is less than the £115.74 added in Bradford.

• Coventry

In fifth place is Coventry, where purchasing a property with a garden costs just £9,761 more on average than one without; this is the second cheapest price after Kingston-upon-Hull. Rental prices are also not dramatically different for properties with a garden in Coventry, with an average cost increase of just £6.43 per month.

Coventry has previously ranked among the top 10 UK cities for public green space, which may be why access to private outdoor space is less important for residents of this city.

Unfortunately, though, total gardening costs are significantly higher in Coventry than the rest of the top five cities, costing residents with a garden £780 on average.

Top 5 cheapest cities to live with a garden 

The most expensive cities to live with a garden in the UK

• London

London is well known for its high cost of living, so it’s no surprise that it was revealed as the most expensive city for living with a garden.

Gardening costs in the UK capital are higher than anywhere else in the country at £1,116, and the cost of a property with a garden is similarly expensive. Renting a property with a garden costs tenants an average of £2,992 per month in London, and purchasing one will set buyers back an average of £1,032,510.

• Bristol

Bristol ranks as the second most expensive city for private green space, thanks to high gardening costs (£1,019) and steeper property prices for homes with a garden.

The average property price in Bristol is £418,409, which increases by £47,455 for properties with a garden. Renting somewhere with a garden will cost tenants £1,559.45 per month on average, which is £110.90 more than renting without a garden.

• Luton

In third place is Luton, which has the second most expensive gardening costs after London at an average of £1,028. Luton is also the most expensive city in the top five to purchase a home with a garden, with buyers needing to invest an extra £61,841 on average to have access to their own green space.

Renting with a garden is also significantly more expensive in Luton, costing tenants an extra £225.05 per month on average.

• Southampton

Southampton is the fourth most expensive UK city for private green space, but the most expensive for renting specifically. Average property rent in Southampton is £1,048.40 per month, but tenants wishing to rent somewhere with a garden will have to pay an additional £350 per month for the privilege.

The average price to purchase property with a garden in Southampton is £40,760 more expensive than the cost of property without a garden, and average gardening costs are also high at £1,025.

• Reading

In fifth and final place is Reading, which ranks lower than the top four cities largely thanks to its cheaper gardening costs. Tenants and homeowners with a garden spend an average of £962 on gardening costs overall, which – despite still being a lot of money – is over £150 cheaper than the amount those in London pay.

Property prices in Reading remain high for homes with a garden, however, costing an additional £58,294 to buy and an extra £221.45 per month to rent.

Top 5 most expensive cities to live with a garden 

How much does it cost to maintain a garden across the UK?

When you consider the cost of keeping things tidy, a garden can be a big investment. Our research revealed that this investment is highest in London, where total gardening maintenance costs reach up to £1,116. This cost accounts for common garden upkeep tasks such as weeding (£72), turfing (£364) and mowing (£36) the lawn, and high-pressure jet cleaning (£137).

Sunderland has the second priciest garden upkeep, with costs averaging just slightly less than London at £1,042. This is followed by Luton (£1,028), Southampton (£1,025) and Bristol (£1,019).

Top 5 most expensive cities for garden upkeep

Landlords in Liverpool can make an extra £545 if their property has a garden 

According to our analysis, the addition of a garden usually does drive up the rental value of a property, but this value varies around the country.

We found that landlords can make the most bang for their buck in Liverpool, which is the most expensive UK city to rent a property with a garden. Landlords charge on average £1,416 per month for a rental unit with its own garden, which is £545 more than average rent price in Liverpool.

Southampton is the second-best city for landlords looking to make the most cash back on their property, with average monthly rent increasing by £350 for properties with a garden. This is followed by London, where monthly rent costs £335 more on average for the addition of a garden.

Top 5 most expensive cities to rent a property with a garden

Landlords in Swansea earn back the value of their property in the least amount of time

By comparing average property prices to average rent prices for properties with a garden, we were able to calculate the locations where landlords can earn back the value of their property in the shortest possible time.

According to our calculations, landlords looking to quickly earn back their investment should look to buy in Swansea, where it would take them 15 years on average to make back the cost of property through rent payments. This is half the number of years it would take to achieve this in Plymouth, where landlords must wait 30 years on average to earn back the money they spent on property with a garden.

Landlords in Edinburgh and Liverpool can also earn back their money quickly, taking 16 and 17 years respectively.

Top 10 cities where landlords can earn back property value most quickly 

What to consider when renting a property with a garden

Having access to your own personal green haven is definitely exciting, but you shouldn’t get too caught up in the excitement and forget that gardens can require a lot of effort to keep them looking fresh. Here are some things that both tenants and landlords need to consider when renting a property with a garden.

General maintenance

General garden maintenance usually involves tasks such as weeding and mowing the lawn. Landlords often include this kind of garden upkeep in a rental contract, requiring tenants to keep the garden looking as tidy as it did when they moved in.

Garden waste 

Gardening can produce quite a lot of waste, whether it be piles of grass cuttings or handfuls of weeds. Landlords who require their tenants to maintain the garden may want to consider paying for a special garden waste bin from the council, which can be used to properly dispose of any waste.

Significant gardening work

Bigger garden jobs such as trimming back hedges or replacing a worn-out lawn are generally the landlord’s responsibility. Tenants should alert their landlord of any problems with the garden, and the landlord can then either deal with it themselves or hire a professional.

Security

Landlords need to make sure that the garden is properly secure; this might involve fixing any gaps in the fence, or making sure that any gates are fitted with sturdy locks. Tenants are then responsible for making sure the garden remains secure, e.g. keeping gates locked and fences undamaged.

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Methodology & sources

The top 30 most populous UK cities were chosen for this research.

The “average price of houses” and “average prices of houses with garden” in each city was revealed by scraping the first 100 newly listed properties on . We then collected data from to analyse the cost of tasks completed by gardeners in each city to determine how much garden maintenance would cost on top of property price. Metrics like Cost to weed a garden, Cost to mow the lawn, Cost to turf a lawn, etc. were considered.

After all the data was collected, we awarded each city an index score to create a ranking of the cheapest and most expensive UK cities to live with a garden.

The post-pandemic world has led to an increase in hybrid and remote working, meaning many workers are now able to do their jobs from anywhere in the world.

Holiday rental service Airbnb has seen an uplift in longer-term bookings as these ‘digital nomads’ look to set up temporary residence abroad. But is Airbnb really the most cost-effective choice for remote workers in need of accommodation?

CIA Landlords Insurance decided to investigate by comparing the average monthly cost of renting a 1-bedroom flat with the average monthly cost of an Airbnb in cities around the world. We’ve revealed where landlords can make the most money from Airbnb and where remote workers can make the most savings by opting for a short-term rental.

Landlords can make the most money from long-term Airbnb lets in London, Amsterdam and Canberra

For landlords looking to take advantage of the rise in longer-term Airbnb stays, the most profitable locations are London, Amsterdam and Canberra.

In London, the average landlord could make up to £12,652 in just one month by letting out their property on Airbnb, or up to £75,912 by letting it out for an even longer-term stay of six months. This makes London the most profitable city to be an Airbnb owner – though this may only be the case for landlords who already own a property here, as the cost of purchasing property in London is also very high.

In Amsterdam, Airbnb could earn landlords between £8,367 for one month and £50,202 for six, depending on the length of stay. Potential profits are slightly lower in Canberra, but still impressive with average monthly earnings of £7,939, rising to £47,634 over six months.

Top 10 most profitable locations for Airbnb landlords 

Digital nomads in London could save nearly £11,000 by choosing a short-term let instead of an Airbnb 

Remote workers wanting to set up camp in the UK capital for a while may want to avoid Airbnb, as this was revealed as the city with the biggest price difference between an Airbnb and a short-term rental.

The average monthly cost of renting a 1-bedroom flat in the centre of London is £1,848. This may be quite pricey, but it’s actually £10,804 cheaper than the cost of an Airbnb, which sets guests back an average of £12,652 for one month. This racks up to £37,956 for three months and a very steep £75,912 for six months. Contrastingly, a six-month rental in London (£11,088) is actually over £1,000 cheaper on average than the cost of a single month in an Airbnb.

Amsterdam and Canberra follow London as the second and third cities where travellers can save the most money by renting short-term instead of staying in an Airbnb. In Amsterdam, the average monthly rental cost is £1,486, which adds up to £8,915 for a six-month period. This is only slightly more money than the cost of one month’s stay in an Airbnb (£8,367 on average). The situation is similar in Canberra, where the average monthly Airbnb cost (£7,939) is £6,769 more than the average monthly rent (£1,170).

Jerusalem, Israel and Wellington, New Zealand round out the top five, with digital nomads able to save over £6,500 on average by choosing to stay in a short-term rental instead of an Airbnb.

Top 15 cities with the biggest price difference between 1 month’s rent and 1 month in an Airbnb

Ankara, Turkey is the cheapest city for short-term renting 

Remote workers looking to cut costs as much as possible could consider a short-term stay in Ankara, Turkey, where one month’s rent costs just £217 on average. This works out as £651 for three months and £1,303 for six, which is cheaper than just one month’s rent in London.

A short-term stay in South America is also a very cost-effective option, with Bogota, Colombia and Santiago, Chile ranking as the second and third cheapest cities for rent. The average monthly rent is £303 in Bogota (£1,818 for six months), and £375 in Santiago (£2,248 for six months).

Top 10 cheapest cities for short-term renting (1-6 months)

Airbnb or renting: which is best for landlords?

With business booming on Airbnb, many landlords may be wondering whether they would benefit more from letting their property out there rather than renting it out through traditional methods. However, while Airbnb is a potentially lucrative business, renting out your property privately or through an estate agent remains a better long-term investment.

Benefits of short-term rentals over Airbnb

• Less time-consuming. Letting your property via Airbnb usually requires you to deal with guests directly, whereas renting it out through an estate agent means they will be able to deal with tenants and things like rent collection on your behalf. This saves a lot of time and effort – though it will also cost you more money due to estate agent fees.

• More stable income. Though longer-term stays are becoming more common on Airbnb, the norm is still shorter stays of a few weeks or less, with potentially long periods between stays. Short-term rentals (e.g. 1-6 months), on the other hand, usually attract longer-term stays of at least a few months.

• More control. Traditional renting gives landlords more control over who they choose to let the property to, allowing you to screen tenants and ask for things like workplace references and financial statements.

• Less wear and tear. Since Airbnb usually involves a higher turnover (i.e. more tenants over a shorter period of time), this will likely lead to more wear and tear and increased chances of property damage. Traditional renting means you’ll likely spend less on redecorating and repairs – though it’s still a good idea to invest in landlord insurance to safeguard your investment.

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Methodology

In this research, we wanted to reveal which locations around the world are more cost-effective for renters. The OECD capitals are taken for this piece of research in order to find the price for both long-term rental and Airbnb we look at “Avg. monthly rent for 1 bedroom in the city centre (£)” using numbeo and “Avg. monthly Airbnb rent for 1 bedroom (£)” using Airbnb.com for October 2022.

City names are searched on Airbnb with filters applied including “Date: 1-31 Oct, Rooms and beds: 1 bed, 1 room, Type of place: entire place, Number of guests: 2 guests” with the data being collected on 21/09/2022. The price for “1 bedroom apartment in the city centre” is scraped from numbeo to find the required metrics.

The data was then indexed using the weighted index formula from highest to lowest, the higher the price the lower the index. These figures were then multiplied by three or six in order to give a quarterly and bi-annual view. To find the difference between Airbnb rent and long-term rent the monthly Airbnb price was subtracted from the monthly Long-term rent price. The final index is an average of the weighted index of the two main metrics “Avg. monthly rent for 1 bedroom in the city centre (£)” and “Avg. monthly Airbnb rent for 1 bedroom (£)”.

Balcony v No Balcony: How much extra could landlords make by investing in properties with balconies and terraces? 

As a landlord, it’s all about how you can maximise the value of the properties in your portfolio. Perhaps a furnished property will fetch you more return on your investment, or even just a new lick of paint and some fresh curtains and carpets.

The old adage “you have to spend money to make money” rings true here: the more you invest in the right kind of changes, the more you’re likely to make back. This means that structural changes like knocking through walls and adding extra rooms and extensions could be a great way to dramatically increase the rental value of your property.

However, there’s one particular structural change you could make that could potentially make you back your investment in less than a year: building a balcony.

New research by CIA Landlord Insurance has revealed the average monthly income landlords can expect to make on properties with and without balconies – and the results are surprising. The research also delves into the areas where renters are most likely to find affordable properties with balconies and the areas where a property with a balcony will be most profitable.

Read on to find out more about what this research uncovered.

How much extra can landlords make by investing in properties with balconies?

With the high demand for properties in cities to have balconies, it’s no surprise that these properties tend to fetch a little more cash. Across the UK’s major cities, on average a 3-bed apartment with a balcony can be rented out for £461 more per month.

This means that over the course of a year, a property with a balcony will bring in an extra £5532 in revenue over similar properties without one.

What is the average cost of installing a balcony?

Sure, £5532 extra average yearly profit sounds great – but to get that you either need to buy a property with a balcony or install one – and balconies don’t grow on trees. However, in the right area, you could make that money back in less than a year.

Installing a balcony can be a tricky and expensive job, but it can increase your rental income on average by 35% per month. It will also increase resale value by anywhere between 5 and 10%. So what does installing a balcony actually cost?

Well, on average, installing a balcony costs around £3000. High-end balcony installation can cost anywhere up to about £5000. More budget-friendly installations can start at £1000.

Cantilever balconies tend to be more predictable in price, with average installation costing between £3000 and £3800.

Juliet balconies are much cheaper, with installation prices ranging from £250 to £1000. However, it’s worth noting that a Juliet balcony is less likely to dramatically increase your rental yield.

Which are the most profitable cities to rent out a property with a balcony?

In certain areas of the country, renting a property with a balcony will net you more profit than others.

The table below shows the top 5 cities where adding a balcony to your property is most likely to bump up your profits.

Whilst it may be surprising that London ranks so low in the top 5, when you consider that the first three cities are beautiful coastal cities with fantastic views it makes sense!

Here’s how much extra a landlord could make in Cardiff if they had a balcony

On average, a landlord in Cardiff can expect to collect just over a thousand pounds a month in rent for a 3-bedroom flat. Over the course of a calendar year, this adds up to a grand total of £13,332.

However, a similar property with a balcony in Cardiff on average fetches a whopping £2,359 per calendar month. Over a year, this is £28,308 in rental yield from one property. This is a 112% increase in yield, just from adding a balcony!

Of course, in the first year, you’ll need to subtract balcony installation costs from your profits, but even a high-end balcony will only run you around £5,000, meaning that you’ll still be looking at a rental increase of 74% over the first year!

In Brighton, Edinburgh and London, landlords installing high-end balconies can expect the installation to pay for itself within a year. In Coventry, it would take just over a year before a landlord could start to expect to see real monetary benefits. However, a cheaper balcony costing under £4,000 would also pay for itself in under a year.

The following table shows the cities where landlords can make the most money renting out properties with balconies and terraces:

Can’t be bothered with Cardiff or Coventry? Bored of Brighton? Not excited about Edinburgh? Not loving London? Well, that’s alright – in pretty much every major city, you’ll see higher rental yield with a balcony. Whilst the percentage increase in rent is much smaller in Birmingham than Cardiff if Brum is where you want to be that 16% increase definitely doesn’t sound too bad!

Where are the least profitable cities for rental properties with balconies?

Well, people love balconies. In every major city included in our research, properties with balconies were more expensive than those without. This means that adding a balcony is probably a pretty great long-term investment no matter where you’re based in the UK. However, you might be wondering where the least profitable large cities are.

The least profitable city is Manchester. The average 3-bed flat in Manchester costs £1473 PCM, but with a balcony, you can expect to bump that up by 9%.

Following in second place for least profitable is Leeds. A 3 bed there costs around 1044pcm, with a 14% increase seen in rent for properties with balconies.

Where are the cheapest properties in the UK to rent a property with a balcony?

The cheapest city to rent a property with a balcony is Belfast. The average 3-bed flat with a balcony in the lovely capital of Northern Ireland will cost around £894 a month. However, if you’re looking for somewhere on the mainland, your next best bet is Sheffield, where a similar property will cost just over £1000.

Looking for somewhere to rent for yourself? Or scouting out the rental yields of the competition? Either way, the table below shows the 5 cheapest cities in the UK where you can rent a property with a balcony.

Which cities have the most properties with balconies available to rent?

Rarity makes for a high rental yield. If you own the only property on the market with a balcony, you’ll be facing zero competition – and everyone loves a balcony! However, if you’re swimming in a sea of balconied properties, you might struggle a little more.

This table shows the cities with the fewest amount of properties with balconies available to rent:

Do renters really want balconies?

We get it: installing a balcony is a big investment. How do you know it will be worth it? That’s why we went a step further, completing a limited email series with more than 2500 respondents to find out if renters really will pay extra for a balcony or terrace.

The evidence was overwhelming. 75% of renters said they would be willing to pay up to £200 more per month for a balcony, as long as it was a full balcony rather than a Juliet balcony. This would mean that even a high-end balcony installation would be paid back in just over two years.

There’s bigger news though: 50% of renters said they would be happy to pay 50% or more per calendar month for a balcony! We’d understand if the increase in rent you could expect to see from a change that costs just a few months of rental yield may be tempting…

It’s clear from this research that landlord’s really can expect to see huge rental increases by installing a balcony, especially in flats in major cities. Landlords: do you think you’ll make the change? Share this research with other landlords in your network and see if they’ll do the same!

Sources and methodology 

We collected rental price data on Zoopla. We selected 3-bedroom flats and filtered for balconies and terraces to get the average monthly rental costs for each UK city. 

Renter response data was collected via an email survey sent to more than 10,000 renters in the UK.