The Top 10 Buy-to-Let Hotspots in the UK

In the final part of our guide to buy-to-let investing in 2020, we looked at numbers 10 to 1 in the UK's top buy-to-let hotspots.

We have already looked at why property still offers excellent potential in 2020, so if you're thinking of becoming a landlord you'll want to know which ten cities are the best places to invest.

Here are the top 10 buy-to-let hotspots in the UK in 2020.

Introducing the Buy-to-Let City Tracker

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

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.

Oxford is the UK's No.1 buy-to-let hotspot

The Aldermore research found that the famous university city of Oxford was the UK's number one buy-to-let hotspot, scoring well in four out of five key indicators.

Oxford's main selling point for private landlords is that it has one of the largest private sector markets of all 25 cities, with 28% of all residents in the city renting privately.

This is combined with above average rental ability (on average £596 per room per month), a low level of vacant properties, and security in investment with property prices having increased yearly by on average 4.8% the past decade. The only downside is that short term return through yield is one of the lowest on the list.

Mortgage expert Darren Meehan says: "Oxford has always had a strong demand for rental properties, due to Oxford Brookes University, The University of Oxford and the many hospitals.

"The level of professional renters is attractive due to the low voids for owners, long tenancies that professionals take, and the properties tend to be well looked after.

“With the large volumes of new housing stock being built all over Oxfordshire, such as Didcot, there are a lot of new opportunities for investors. These new builds outside the city centre are more affordable to investors and they also target the commuters, so Oxfordshire really does have something for all budgets.”

The Top 25 buy-to-let locations in the UK: numbers 1 to 10

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. 

Here's the top ten: 

Strong performance from many popular buy-to-let cities

Manchester came in a close second on the Aldermore list, not least because the city attracted a significant number of investors who snapped up property after the BBC moved to Media City in Salford Quays.

Mortgage expert Richard Ignatowicz says: "Having recognised the excellent returns, investors are now seeing other parts of Manchester experiencing a ripple effect, such as Ashton and Oldham, which are served by the Metro and within easy commuting distance to the city centre.

"HMO conversions are especially popular and currently providing double-digit returns.”

A combination of steady demand from professionals, a large student population, and a strong influx of short-term tenants for the internationally renowned festival sees Edinburgh take third place in the list.

Perennial investment hotspot London comes in fourth place in the research and, in some cases, outperforms Oxford.

For example, property prices have increased faster at 5.5% a year on average over the past decade (compared to 4.8% in Oxford). However, despite strong rental prices (at £630 per room per month); very high property prices in London (£617,238 on average) means annual rental yields are very low for a new buy-to-let purchase at only 3.0%.

Norwich rounds out the top five. Property expert Jorden Abbs says: “Norwich is a strong commercial and educational centre and it is an hour and a half from London on the train. The city is surrounded by countryside and the beach is also just 40 minutes’ drive away.

"Norwich offers landlords a full breadth of property investment options. Student lets serve the University of East Anglia and Norwich University of the Arts, city centre HMOs target young professionals, standard buy-to-let covers a full spectrum from family homes to luxury apartments, and with so much in and around the city, holiday lets also enjoy year-round appeal."