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The Best Buy-to-Let Cities in the UK

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Published
09/20/2018

If you’re looking to invest in a buy-to-let property, you’ll want to be sure you’re getting the best deal for your money and secure a profitable long-term investment. There are plenty of beautiful cities in the UK, but not all of them have landlord-friendly residential markets.

While you might be seeking luxurious surroundings for your own property, you need to focus more on business sense when you’re buying to rent. Luckily, the Buy-to-Let Index Quarterly Report features the most profitable postcodes for landlords based on rental yield capital gains and rental price growth. These are some of the UK’s top contenders.

Manchester

Currently the best city to buy-to-let in England, Manchester has the highest rental yield of all at 5.55%, as well as an impressive rental price growth of 5.76%. The rental market in Manchester is strong because of its vast student population of 100,000 and healthy infrastructure investment. The economy is also on an upswing, with a £70 billion proposal to transform northern transport lines. Manchester boasts four universities, and most popular rental areas include those in the M6 postcode – Pendleton, Claremont, Langworthy and Salford.

However, if you’re a first-time buyer considering an ARM mortgage, a Manchester property might not be an affordable option. Other Northern areas such as Derby and Yorkshire still enjoy a healthy student population, but homes are far more affordable – especially in local authority housing areas 

Colchester and Luton

Colchester in Essex and Luton in Bedfordshire came in second and third positions on the Buy-to-Let Index. Both areas boasted rental yields of over 3.78% and strong capital gains. Colchester comes out with a sales volume growth of 2.79%, while Luton is a popular commuter town within easy reach of London, making it attractive to the working population who want to live outside of the big city. 

The Midlands

For those looking to invest in buy-to-let property, The Midlands is an area to watch. Leicester has risen 17 places between September and December 2017 to achieve ninth place on the most recent Index, while Birmingham came in at number 11. Leicester’s attractive residential market is responsible for the city’s rise up the ranks, while Birmingham boasts the largest professional service sector outside of London.

Birmingham’s housing market has become even more attractive to investors thanks to the plans for HS2 – the forthcoming high-speed rail line that will connect London to Birmingham. There has also been significant regeneration in the city, making it a great time to invest in the residential market.

To conclude

Predictions for the overall growth of the housing market in the UK remain positive for the years ahead, with top places to invest being Manchester, Luton, Colchester, Northampton, Leicester, Brighton, and Ipswich.

If you’re thinking of becoming a landlord or expanding your property portfolio, house price growth, capital gains and rental yields are all crucial factors for landlords and property investors to consider. This data will help inform your decision, so you can make sure your property performs as a long-term asset.

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