Landlords looking for the UK’s best buy-to-let areas in 2021 should consider Manchester, but areas in the South East dominate the top 10.
Manchester is ranked first on Aldermore Bank’s city tracker, which ranks the UK’s best areas for buy-to-let.
This list isn’t based only on the best rental yields, traditionally the most desirable aspect of buy-to-let.
Instead it takes into consideration a combination of five factors, including:
Here’s a snapshot of the results using these five factors:
Manchester is ranked top of Aldermore Bank’s list. Manchester’s main selling points for private landlords are that it performs well on core factors, such as rental returns and long-term house price growth.
It has one of the biggest rental markets in Britain, with 31 per cent of Manchester’s population being private renters.
It also has some of the lowest vacancy rates across any city included in the tracker.
This is combined with above-average rental rates – on average £428 per room a month – and a rise in property prices of 4.1 per cent every year on average during the past decade.
But despite a number of cities in the North ranking highly on the list, the South East remains the best region for buy-to-let, with four cities making the top 10. These include Oxford, Brighton, Reading, and Milton Keynes.
What’s more, Northampton, Swindon, and Reading are new entries into the top 10.
Here are the top 10 areas for buy-to-let:
|Milton Keynes||South East||64|
The remaining cities in the top 25 best areas for buy-to-let are:
According to Aldermore Bank, you can find some of the UK’s best rental yields in Yorkshire.
Cities in Wales struggle in Aldermore Bank’s rankings. While it only lists 50 areas, the bank says that Wales appears to be a less appealing region for landlords – Newport and Swansea sit in the bottom two.
While Swansea has the second lowest available rental returns (£324 per room a month), it does have a rental yield of 6 per cent. Average annual house price growth is only 1.5 per cent, which might not translate well to long-term returns.
Cardiff does place higher (27th), with rent returns of £418 per room and a short-term yield of 5.6 per cent.
Here are the bottom 10 areas in the list:
Jon Cooper, head of mortgage distribution at Aldermore, said: “There has been a high level of uncertainty for landlords since the Covid-19 outbreak and they have had to continuously adapt to a raft of challenges.
“But with so many working from home right now, it reinforces the importance of a robust and diverse private rented sector.
“The changing needs of renters, whether to move to a new location or a different type of property to fit flexible working demands, has created investment opportunities for landlords.”
Where will you next purchase a buy-to-let property? Let us know in the comments below.
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