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UK Buy to Let Hotspots

By Mark Langshaw

Published: 29th April 2019 Last updated: 29th April 2019
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Where are the best places to get a Buy to Let?

We’ve had hundreds of people wanting to know where the best buy to let areas are and, let’s face it, investing in a Buy to Let property in the UK or elsewhere in the world can be a great way of earning an income from rental fees as well as the potential profit when the property is sold.

Whether you’re considering a Buy to Let in the UK or overseas, to put your mind at ease, we’ve listed everything you’ll need to know about the best Buy to Let areas in 2019, as well where you can go for advice.

Where are the current Buy to Let hotspots?

While commuter towns around London remain some of the most popular Buy to Let locations, they can be very expensive.

Even if you’re an investor who has enough money to afford a Buy to Let property in or near London, it doesn’t necessarily mean that you’ll see a bigger return on your investment. Sure, you can charge a higher rate of rent, but it might not always outweigh the costs of the initial purchase.

That’s why many people are now looking at other Buy to Let investment areas such as Northern Ireland, Scotland, Liverpool and Leeds, where the property is cheaper to buy. For some investors, this is far more affordable and when applying for a Buy to Let mortgage for a less expensive property, could make it more likely to get approved.

So, where is the best place to get a buy to let mortgage in England?

According to data published by Totally Money in Q4 2018, the best areas for buy to let investment in the UK are…

  • Nottingham
  • Liverpool
  • Manchester
  • Leeds
  • The North East

Buy to let yields in Nottingham

Nottingham topped the list with a rental yield of 11.99% in its most sought-after area. Properties in the NG1 postcode, a student hotspot, are the top performers due to their prime location in close proximity to Nottingham Trent University.

The NG7 postcode has also proven fruitful for landlords, with an average rental yield of 8.89%.

Buy to let yields in Liverpool

A total of six Liverpool postcodes were ranked among the top 25 best buy to let areas in the UK. L7, which spans the city centre, Edge Hill, Fairfield and Kensington, was the standout area with an average rental yield of 9.79%.

Other top-performing areas include L1 and L2, both of which cover the city centre, as well as L6.

Buy to let yields in Manchester

According to Totally Money’s figures, Manchester ranks highly and the area with the highest rental yield is the M14 postcode (7.07%), covering Fallowfield, Moss Side, Ladybarn, Rusholme and Victoria Park.

The M13 postcode also produced an attractive yield of 6.89%, likely due to its close proximity to the University of Manchester and two of the city’s hospitals.

Leeds' buy to let yields

Leeds’ buy to let hotspot area is the LS6 postcode (7.43%), an area which includes the sought-after suburb of Headingley and good commuter links to the city’s two universities.

Buy to let investment in Newcastle and the North East

Areas in the North East of England, including Newcastle Upon Tyne, York and Durham were the best of the rest, according to the Q4 data.

The NE1 postcode, which is near Newcastle’s two universities, has an attractive rental yield of 8.16% and an average property price of £161,000.

Covering Walker, Byker and Heaton, NE6 is also a standout performer with an average yield of 8.43%.

Rental yield for a Buy to Let property in London

According to Totally Money’s research, rental yields in London remain low, largely due to the high property prices in the UK capital.

It’s best performing area when the data was compiled was East Ham, where rental yields averaged out at 4.81%.

The following example will put into context what you can expect in terms of London rental yields...

Landlord B purchases a Buy to Let property in London for £500,000 and charges £1,400 a month in rent making his annual rent £16,800.

To calculate the rental yield he divides his annual rent by the property price - (£16,800 / £500,000 = 0.033). He then multiplies this by 100. This means that the rental yield is 3.3%.

This could suggest that when considering the best places for Buy to Let investments, that perhaps, based on the much lower rental yield, they should not consider London. However, this doesn’t take into account the potential profit they could make if they choose to sell the property in a few years time.

Is a Buy to Let in London a bad idea?

Not necessarily. Capital appreciation is a big factor in the decision making process when buying a Buy to Let in London. This is because property investors in London often see fairly profitable increases in their property's market value.

What are the best Buy to Let areas in London?

London has been the go-to market for those looking to make big capital increases with demand increasing for properties in the outer London areas too.

There are a huge number of working professionals in the surrounding areas of London, with many choosing to commute into the city rather than pay higher rates of rent in the city centre.

Therefore there is great demand for rented property which could make it easier for you to find tenants.

At the time of writing, the areas offering the highest rental yields in London are Dagenham, Barking & Romford. As a general rule, the closer you get to districts in the centre of London such as Westminster, Knightsbridge, Chelsea and Fulham, the lower rental yields you’ll find.

However, predicting property fluctuations is near impossible. It is clear though that many landlords are shifting their investments and purchasing Buy to Let property in Leeds, Manchester, Liverpool and Birmingham and many other regions in the north of the country, as many properties allow investors to make more of a return.

How do I find out the rental yields for a Buy to Let area?

So where is the best place to buy a Buy to Let property? When deciding on where to invest in a Buy to Let property in the UK or abroad, it can be really helpful to work out the rental yield.

Step 1 would be to check for similar properties on Rightmove. This is one of the best ways of finding out how much rent you should be charging.

Simply find a similar property to the one you have and use that as a guide. Remember, the proximity of schools (and especially universities), transport, shops and entertainment will have an effect on how much rent you can charge.

It could also be worth checking out other property portals like PrimeLocation and Zoopla.

Surprisingly Gumtree can be an excellent source of information, because many private landlords advertise their properties directly, unlike Rightmove which is predominately used by agents.

Another method you could try is to simply look in the local newspapers.

Once you have a figure, divide it by the market price of the property and multiply by 100 to give you your rental yield percentage. The higher the percentage, the better value the property.

What is a good rental yield?

A decent Buy to Let property should ideally have a rental yield of 7% - 8% or more, any less and you may not have enough rental income to cover running costs, mortgage payments, maintenance etc.

If you’re considering a particular property or area, calculate the rental yield and determine whether you can afford your mortgage payments and any unforeseen, expensive problems that could occur whilst your tenants are there.

When you are trying to find the best area for a BTL to invest your money, you need to be careful that you choose somewhere where the rental returns make sense.

Of course, rental yield is not the only factor that might determine whether a property is a profitable or safe investment. You might also want to consider the potential capital appreciation, (the potential increase in value of the property itself), which if you believe is likely, it may be worth a lower income yield to benefit from.

Are there different rules on buy to let mortgages in different locations?

Yes, this is a problem that many landlords face when applying for a Buy to Let mortgage whether that be in Ireland, England, Wales, Scotland or elsewhere. There are also certain areas in the UK that lenders deem as higher risk in the mortgage market. This could be because of falling levels of unemployment in the area, low levels of wage growth or falling house prices.

You may find, for instance, that a lender based in the south of England might not lend to an applicant wanting to buy a property in the north and vice versa.

Landlords applying for a Buy to Let mortgage in rural areas including some parts of Wales, Scotland and Northern Ireland can sometimes find that where there are fewer properties and a lower population, there may be fewer lenders and options.

Some of the most popular places to Buy to Let are based in the Midlands and in the north of the UK, which can be frustrating if you live in the south and your local lender won’t accept mortgage applications for a property so far away, which is why a mortgage advisor who can find the right lenders for you, can be really helpful.

Should I get advice before applying for a Buy to Let property?

We always recommend getting advice before applying for a Buy to Let mortgage.

Researching Buy to Let mortgages in the UK can be really time-consuming and stressful, but the mortgage advisors we work with can do all of this for you.

They will dedicate their time to research the best places to Buy to Let as well as the best lenders based on your circumstances. They can also assist you through the process of applying for a mortgage whether that be in the UK or overseas.

Will you have a broker for the area I want to Buy to Let in?

Whether you’re thinking of a buy to let in Edinburgh, Northern Ireland, London or wondering where the best areas for buy to let are, the expert advisors we work with can help you with Buy to Let mortgages in...

  • Scotland including Edinburgh and Glasgow
  • Northern Ireland
  • Birmingham
  • London
  • Liverpool
  • Leeds
  • Cardiff
  • Ireland
  • Manchester
  • Leeds
  • France
  • Canada
  • Various other overseas territories

Can I buy a Buy to Let abroad?

It can sometimes be more complicated to get a mortgage for an overseas property, for instance, a Buy to Let in France, Spain or even Canada because every country has different rules, taxes and processes when it comes to property, not to mention a different language.

If you’re hoping to get a Buy to Let mortgage for a property abroad there are a couple of ways that you could apply. One is that you could apply for an international Buy to Let mortgage in the UK and the second is that you could apply for a mortgage overseas.

The first option can be easier sometimes as you’ll be dealing with a UK bank and may be more familiar with the processes of a mortgage application. The second option can sometimes take a little longer, especially if you aren’t familiar with the language.

Using an international lender to apply for an overseas Buy to Let mortgage

That’s why if you’re applying for a mortgage overseas, it is a good idea to use a specialist mortgage advisor in the UK who speaks both English and the native language. They should also understand the property laws and have experience with mortgages in the country you’re purchasing in.

A benefit of this is that they can compare mortgage deals in the country that you’re buying in as well mortgage deals in the UK. This could be great for you as a buyer as mortgage rates in some parts of Europe are lower than in the UK, which means that you could get a better deal.

For more information on international mortgages overseas, click here.

Speak to a mortgage expert today

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

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