New research has unveiled the top locations for buy-to-let investment while also highlighting the markets driving the investment in these areas.
The analysis of new lending data has revealed that the CF24 postcode in Cardiff was the most popular area for buy-to-let landlords last year. This outcode includes Cathays and Roath, which are some of the most popular areas for students moving to the Welsh capital to attend one of its three universities. Landlords investing here can expect average rental yields of 8.7 per cent.
The second most popular location for buy-to-let landlords was the B29 outcode area in Birmingham where rental yields of 7.5 per cent are typically generated. This postcode encompasses the affluent areas of Bourneville and Edgbaston, as well as the Selly Oak district, which is home to both the University of Birmingham, ranked among the world’s top 100, and the Queen Elizabeth Hospital, one of the UK’s largest single-site healthcare facilities. This makes it an attractive area for investors looking to cater to the substantial student and public sector staff markets.
The PL4 outcode area of Plymouth ranked third on the top buy-to-let hotspots list. Like Cardiff, Plymouth has a rich maritime history and has transformed into a modern, cosmopolitan coastal city. The area boasts excellent transport links, green spaces and a variety of shopping and entertainment options, making it appealing to a diverse range of tenants. The PL4 postal area serves both student and key worker markets, with the University of Plymouth and Mount Gould Hospital located nearby. Another positive for the area is that buy-to-let properties in the region generate impressive rental yields of 9.6 per cent, ranking the PL4 postal district second among the top investment hotspots.
Other locations on the buy-to-let hotspot list include the LS6 postal area in Leeds, the NG7 and NG3 postal zones in Nottingham, the M14 postcode in Manchester, the GL1 area of Gloucester and postcodes in Liverpool and Stoke.
The analysis found that terraced houses were the preferred property type for investors in all of the top locations, except for Nottingham’s NG3 area, where converted flats were the most popular with buy-to-let landlords.
Neil Smith, Head of Surveying at Paragon Bank, which conducted the research said: “Even though privately rented homes are in short supply all over the UK, landlords are strategic and often target locations with consistently high demand.
There is also a notable propensity amongst buy-to-let landlords to invest in property types that can deliver strong yields, often terraced houses and HMOs.”
