Where are the Best Areas In the UK For Buy-to-Let Investors In 2024?

A recent market report issued in March 2023 by Zoopla has suggested buy-to-let rental premiums across the UK continue to soar. Overall rental inflation currently stands at 11.1% and whilst this figure shows a slight reduction from the middle of 2022 (12.3%), premiums have, on average, risen by 20% over the last three years.

On the surface this may appear to be good news for existing landlords, however, Zoopla’s report also went on to say that rental inflation was expected to reduce by the end of the year to around 4% and 5% and that the slowdown would be felt mostly in areas where rents have traditionally seen the highest growth – namely, inner London and other large city centres.

This regional disparity means anyone who is looking for their next (or first) buy-to-let investment may need to carefully research where in the UK could offer the best rental yield returns moving forward.

Top 10 UK Cities and Towns by rental yield

If you want to base your buying decision purely on rental yield returns, then the latest information on where these figures are highest suggests you should be looking into the following areas:

Source: Tracker Capital

One common link between the above locations is that, except for Southampton, the average house price is below the current national average (£257,122). In the case of Glasgow, Middlesbrough, Dundee and Preston, significantly lower.

This means investing in one of these areas not only provides a strong opportunity for rental yield return but also represents value for money in terms of the property purchase price.

Top 10 UK Cities and Towns based on a wider range of key metrics

Aldermore Bank’s Buy-To-Let City Tracker index provides information about which towns and cities across the country are currently ranking highest, not just based on rental yield but in terms of overall returns using the following indicators:

• Average overall rent (per room per month)
• Rental yield returns in the short-term
• Increase in house prices in the long term
• Lowest vacancies versus overall housing stock available
• Area/City population currently in the rental market

From this analysis, Aldermore’s latest tracker index update (as of April 2024) concluded the top ten locations for buy-to-let investors are as follows:

Bristol secured its place at the top of this list based mainly on the long-term growth potential of properties in the area, which has seen a 6.6% increase in property values, and a high proportion of long-term renters available.

London’s high ranking was mainly based on having the highest average overall room rent (£660 per month) and a healthy percentage of the population (29%) already in the rental market. However, short-term rental yields in the capital are relatively flat at 5.1% compared to other areas in the top ten list.

Places such as Milton Keynes, Basildon and Cambridge are all regarded as being within commutable distance from London and, therefore, offer a more cost-effective alternative for both renters and buy-to-let investors looking for cheaper purchase prices.

Working out your rental yield

If you’ve found a buy-to-let property you’re interested in and you have an idea of the amount of income it could generate, use our calculator below to work out how much the rental yield would be:

What you should do next

Trying to research where the next opportunity lies for your buy-to-let investment can be quite time-consuming and with an ever-changing landscape can also prove to be difficult to know if you’ve made the right decision.

The shrewd move would be to first seek the help of an experienced buy-to-let mortgage broker. Using our free broker-matching service we’ll be able to introduce you to a specialist in this field who can help not only identify the best buy-to-let mortgage options but they’ll also know where the best areas are for your investment.

So get in touch or give us a call on 0808 189 2301 and we’ll make sure an advisor we work with contacts you to discuss this further.