The Top 25 Buy-to-Let Hotspots in the UK: Part 1

Posted 14 January 2020 by Nick Parkhouse

Where are the best places in the UK to invest in property? We share numbers 11 to 25 on a new list of the UK's buy-to-let hotspots

In  our ongoing series on buy-to-let investing, we looked at why property is still a viable investment across many UK towns and cities in 2020.

Despite tax changes, a rise in the availability of limited company buy-to-let lending, coupled with the expectation of rising property prices, mean there is still solid potential for commercially-minded landlords.

Of course, to achieve good rental yields and capital growth you need to do your homework. Here, we look at extensive research which highlights the top 25 buy-to-let hotspots in the UK.

Before we reveal the top 10 locations next time, here are numbers 11 to 25.

 

Introducing the Buy-to-Let City Tracker

One of the UK's leading challenger banks has analysed data from 25 of the UK's major cities to understand the best places for landlords to invest.

The Aldermore Buy-to-Let City Tracker was determined by analysing and assessing five key indicators that impact desirability:

  • Average total rent per room, per month
  • The best short-term returns through yield for a buy-to-let purchase
  • Long-term return through house price growth over the past ten years
  • The lowest number of vacancies as a proportion of total housing stock
  • The percentage of the city population in the rental market.

The index uses a series of secondary data sources including the Office for National Statistics, Census and other official housing statistics. 

Wolverhampton sits at the bottom

Sitting just outside the top 10 were the cities of Plymouth, Hull and Leicester.

While the city of the 2016 Premier League champions features strongly on the list, other Midlands cities don't fare as well, with Derby in 21st place and Wolverhampton in 25th spot.

The West Midlands city has the smallest rental market (only 12% of residents privately rent). As a result, vacancies are above average (at 3.1% of properties) suggesting that landlords might struggle to always fill their properties.

Three Yorkshire towns feature in top 25

Yorkshire may be a strong area to invest in for buy-to-let, with three cities in the county in the top 25.

However, it's worth bearing in mind that Sheffield has one of the lowest rental prices (£324 per room per month), and is not a good short-term investment, with a below average yield of just 5.3%.

Bradford meanwhile suffers with poor price rises (only 1.6% per year) and a high number of property vacancies (4.1%). However, Hull ranks at 12th on the list, boosted by the highest short-term yield of all 25 cities (9.3%).

The Top 25 buy-to-let locations in the UK: numbers 11 to 25

As well as highlighting the ranking, city and the Aldermore City Buy-to-Let Tracker score, we have also highlighted one of the most attractive new-build developments in each of the cities. Click the link in the table to find out more about each development.

 

Ranking City/town Score New homes to consider
11 Plymouth 54 Saltram Meadow, from £186,500
12 Hull 49 Attraction, from £210,000
13 Leicester 49 Glebelands Park, from £247,750
14 Coventry 49 Deram Parke, from £140,995
15 Southampton 48 Centenary Quay, from £185,000
16 Birmingham 47 B5 Central, from £180,500
17 Liverpool 44 Regency Manor, from £190,000
18 Cardiff 39 Goitre Fach, from £450,000
19 Glasgow 37 Riverside @ Cathcart, from £190,995
20 Leeds 32 Drovers Court, price on application
21 Derby 31 Highfields, from £334,995
22 Sheffield 30 Elderwood, Bannerdale, from £334,995
23 Bradford 29 Brompton Fold, from £224,995
24 Newcastle 26 The Rise, from £142,500
25 Wolverhampton 25 Akron Gate, from £189,950

 

"Great short and long-term investment opportunities for landlords"

The research shows that there are still plenty of attractive locations across the UK for landlords to consider.

Damian Thompson, director of mortgages, Aldermore comments: "Aldermore’s Buy-to-Let City Tracker shows there are still great short and long-term investment opportunities for landlords.

"The number of people renting in the UK has been rapidly growing, up 1.7 million in ten years, so private landlords are an increasingly central part of the housing market as supporting a robust and strong private rented sector becomes more essential.

“The UK housing market has never been a singular thing, instead made up of multiple smaller markets with their own unique conditions and challenges.

"There have been numerous regulatory changes recently and persistent economic uncertainty but this affects every region differently. Going forward, landlords will need continual backing and advice from lenders and the wider industry so they can provide choice, diversity of tenure and quality properties for renters.”

 

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