Buying property in the right areas is crucial for landlords, so where in the UK can you benefit from attractive returns in 2022?
Read on to find out the top towns and cities attracting property investors, the most popular locations for HMOs, and where landlords new to the market are buying properties.
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Bristol has taken top spot in Aldermore Bank’s buy-to-let city tracker, which ranks the UK’s best areas for buy-to-let. The city in the South West rises from seventh in last year’s rankings, overtaking Manchester which has fallen down to fourth.
Aldermore’s tracker is based on five key factors which combine to make investment locations appealing to landlords:
Here are some of the key findings from the latest research:
|2022 ranking||Area||Region||Overall score||2021 ranking|
|1||Bristol||South West||75||7 (+6)|
|2||Oxford||South East||73||4 (-2)|
|4||Manchester||North West||69||1 (-3)|
|7||Northampton||East Midlands||67||6 (-1)|
|8||Brighton||South East||66||5 (-3)|
The remaining towns and cities in the top 25 best areas for buy-to-let are:
Research by Simply Business has identified the buy-to-let areas that are most popular with new landlords.
We looked at which areas had the most landlords who’ve owned property for less than a year and taken out landlord insurance in 2021.
London came top, followed by Birmingham, Manchester, Liverpool, and Glasgow. It’s interesting to note that the top five buy-to-let areas for new landlords are all major UK cities where tenant demand is likely to be high and property price growth likely to be steady.
The top ten was made up of:
All of these areas have well-known universities. Letting to students is often popular with new landlords due to the lower acquisition costs, annual demand, and potential for high rental yields.
Houses in multiple occupation (HMOs) are larger properties that can be let to three or more people from more than one household who share living facilities.
For example, a house share of five young professionals would count as a ‘large HMO’. Read our guide to HMOs for further details.
To successfully let an HMO, you need to be operating in the right market – somewhere with lots of students or young professionals could be an ideal location.
If you’re looking to buy and rent out a larger property, here are the top five hotspots where we saw the most HMO landlords take out insurance during 2021:
It’s no surprise that all of these cities have multiple universities and strong employment markets, making them popular with young professionals – and so appealing to HMO landlords.
The type of property you rent out is likely to have an impact on the prospective tenants it attracts.
For example, houses could be more popular with families, while flats may appeal to young professionals, and bungalows could be more suitable for older renters.
We’ve taken a closer look at where the most landlords took out insurance policies for different property types during 2021.
The top hotspot for detached houses was Nottingham, while London was most popular for terraced and semi-detached houses. Birmingham was also popular with landlords who own houses, featuring in the top five for all types of house.
London was the most popular location for landlords renting out maisonettes, followed by Birmingham, and Southampton.
Meanwhile, Nottingham, Leicester, and Lincoln were the top buy-to-let areas for bungalows.
The top UK area for flats was London, followed by Scottish cities Glasgow, Edinburgh, and Aberdeen, with Manchester making up the top five.
As in 2021, Aldermore’s data suggests that locations in Wales are less appealing for landlords. Swansea and Newport take the bottom two spots of the top 50, while Cardiff comes in at 36th.
According to Aldermore, falling rental prices and a large supply of rental properties in Wales are increasing competition among landlords, making the areas less attractive as investment locations.
However, landlords looking to buy a property in Wales could receive a long-term return on investment by targeting Swansea thanks to property price growth of three per cent.
Here are the bottom 10 areas in the list:
Where are you looking to buy property in 2022? Let us know in the comments below.
Photograph 1: Stephen Davies/stock.adobe.com
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