Landlords and investors scanning the market for high-return locations may be interested in new research revealing the areas where rental yields are gathering momentum. While many turn their attention to traditional hotspots, new data suggests some unexpected regions are quietly leading the charge when it comes to growing returns.
The latest figures show that Manchester currently offers the highest average rental yield in England and Wales of 6.35 per cent. The North West city continues to attract students and young professionals, fueling strong rental demand and bolstering landlord returns. Merthyr Tydfil in Wales follows closely behind at 6.28 per cent, Portsmouth ranks third at 6.21 per cent and Newcastle, with a rental yield of 6.02 per cent, comes fourth. Salford, the City of Bristol and Southampton all return yields of 5.91 per cent while Nottingham follows at 5.86 per cent. Lincoln with an average rental yield of 5.80 per cent takes ninth place while Blackpool rounds off the top 10 with a yield of 5.78 per cent.
At a regional level, the North East boasts the highest average rental yields at 5.28 per cent while the North West takes second place with an average yield of 5.07 per cent followed by Yorkshire and the Humber at 4.78 per cent, London at 4.74 per cent and the South West at 4.56 per cent.
Beyond these headline numbers, the data also highlights a significant shift in London, where rental yields – historically lower than in northern cities – show notable improvement. Yields in the City of Westminster rose by 1.36 per cent over the last year, bringing the current average to 4.38 per cent. Kensington and Chelsea also saw yields increase by 1.08 per cent to 3.88 per cent.
London’s upward trend extends across several boroughs, with Islington (up 0.74%), Hammersmith and Fulham (up 0.73%), Brent (up 0.71%) and Hackney (up 0.66%) all posting meaningful gains. Outside the Capital, yields in Wales are also on the rise, with Merthyr Tydfil seeing a 0.89 per cent uplift, Newport up 0.71 per cent and Torfaen rising by 0.57 per cent.
Commenting on the findings, Saveli Kotz, Founder and CEO of property platform Cohab, which conducted the research, said: “The buy-to-let sector continues to offer an abundance of opportunity for bricks and mortar investors and not only are there a wealth of areas boasting very strong yields in the current market, but we’ve also seen healthy yield growth over the last year, particularly across the London market.”
Overall, the analysis underscores both established and emerging opportunities for landlords seeking to optimise rental returns.
