The 10 most popular Buy-to-Let hotspots in the UK

Mortgage lenders Paragon Bank recently revealed the most popular Buy-to-Let hotspots amongst portfolio landlords with four or more properties.

Based on the data, it’s emerged that established landlords are increasingly shunning London largely in favour of student cities located predominantly in the north and West Midlands.

Keep reading to find out the top Buy-to-Let locations in the UK if you’re looking for your next investment.

1. Manchester (M14)

Average property value: £367,461

Estimated rental yield: 7.5%

Manchester’s M14 postcode is the nation’s top Buy-to-Let location. Its main draw is a thriving student population, with the University of Manchester and Manchester Metropolitan University on its doorstep, and the popular student districts of Fallowfield and Rusholme (famed for its curry mile) within its boundaries.

With excellent rail and tram links, and Manchester Royal Infirmary nearby, landlords can expect a rental yield of around 7.5%. 

 

2. Birmingham (B29)

Average property value: £573,116

Estimated rental yield: 6.9%

The country’s second most sought-after Buy-to-Let location is Brimingham’s B29 postcode. Encompassing the Selly Oak district, this is another student hotspot given its close proximity to The University of Birmingham.

It’s also a prime location for professional tenants working at the nearby Queen Elizabeth Hospital, which is one of the country’s biggest hospitals and a major employer in the area. Rental yields average around 6.9% in this area.

 

3. Durham (DH1)

Average property value: £401,891

Estimated rental yield: 7.3%

Offering a favourable rental yield in the region of 7.3%, Durham’s DH1 postcode is one of two North East locations attracting the interest of portfolio landlords.

Once again, the principal attraction of this city centre location is its proximity to the University of Durham.

Part of the prestigious Russell Group, the university consistently ranks amongst the top ten in the UK and top 100 in the world, attracting a student population of over 20,000.

 

4. Nottingham (NG7)

Average property value: £343,700

Estimated rental yield: 7.7%

Further underlining the attraction of university cities, Nottingham’s NG7 postcode is also proving popular with landlords. The area encompasses popular student areas such as Lenton, Arboretum and neighbouring Beeston.

With the city centre close by, as well as major NHS employers like Nottingham City Hospital and Queen’s Medical Centre, landlords tempted by this area can expect rental yields in the vicinity of 7.7% for their investment. 

 

5. Cardiff (CF24)

Average property value: £406,620

Estimated rental yield: 7.6%

With projected rental yields of around 7.6%, landlords have flocked to Cardiff’s CF24 district.

This area of the Welsh capital takes in vibrant student areas, like Catthays and Roath, which are popular amongst scholars from Cardiff University and Cardiff Metropolitan University.

This postcode area borders the compact city centre and extends to cosmopolitan Cardiff Bay, with major employers like The Senedd and the University Hospital of Wales nearby.

 

6. Newcastle upon Tyne (NE2)

Average property value: £524,208

Estimated rental yield: 6.5%

The second North East location to make the list is Newcastle upon Tyne. Portfolio landlords have been drawn to the NE2 postcode area of the city, which comprises the trendy neighbourhood of Jesmond.

This affluent suburb in the north of the city boasts a thriving nightlife and restaurant scene, leafy residential streets, and a sizeable student population from Newcastle University and Northumbria University. Rental yields here are around 6.5%.

 

7. Stoke-on-Trent (ST4)

Average property value: £130,990

Estimated rental yield: 6.5%

Returning to the Midlands, Stoke-on-Trent’s ST4 neighbourhood offers the highest potential rental yield of all the top Buy-to-Let locations at an impressive 9.1%.

This is thanks in large part to the comparatively cheaper house prices in The Potteries, with an average property value of £130,990.

The ST4 district encompasses Staffordshire University, the city’s train station, and the popular student suburbs of Shelton, Hanley, Penkhull and Boothen.

 

8. Leicester (LE11)

Average property value: £275,561

Estimated rental yield: 7.4%

Leicestershire’s LE11 postcode centres around Loughborough, with Loughborough University as its focal point.

One of the country’s top 20 research centres and famed for its sporting prowess, the university attracts a student population of 19,451 scholars.

Portfolio landlords looking to invest in popular student areas within the LE11 postcode – such as the Golden Triangle, Burleigh and Kingfisher Way – can expect rental yields of up to 7.4%.

 

9. Crewe (CW2)

Average property value: £154,961

Estimated rental yield: 8.7%

Crewe’s CW2 postcode area is the only outlier on the list of the top Buy-to-Let locations in the UK with no major university.

The attraction of this Cheshire railway town is its transport links. The CW2 area is conveniently located near Crewe train station, which offers direct services to most major cities, including London and Manchester.

With major employer Bentley Motors nearby, landlords can expect a healthy rental yield in the vicinity of 8.7%.

 

10. Brighton and Hove (BN2)

Average property value: £489,662

Estimated rental yield: 6.3%

Rounding out the top ten most popular Buy-to-Let locations is the BN2 district of Brighton and Hove.

With Brighton University and the University of Sussex, two hospitals, and Brighton Beach in the vicinity, not to mention excellent transport links with London, the BN2 area is popular with students, professionals and families.

Landlords targeting popular suburbs like Kemptown, Hanover and Elm Grove can expect to reap rental yields of around 6.3%.

As this list illustrates, there are ample opportunities for landlords to expand their portfolios if they target the right locations.

It’s clear from the data that university towns and cities are the main draw for portfolio landlords seeking healthy rental yields for their investments.

All but one of the locations on this list of the top Buy-to-Let locations in the UK are major student centres, demonstrating the importance of student lets to the private rented sector.

If you’re a landlord with an expanding portfolio of properties, you will appreciate the importance of good quality insurance.

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For more information about Landlord Insurance and Landlord Portfolio Insurance, contact us on 0800 035 8258 to discuss your options and receive a quote. For the latest UK rental trends, check out the HomeLet Rental Index.