Landlords and buy-to-let investors looking to achieve the highest rental returns need to look at a variety of factors, but one of the most influential elements is location.

Property is still one of the most popular investment choices in the UK, but for both experienced landlords and new investors looking for their first property, one thing is clear – where you buy can have a huge impact on how much money you make, both in terms of yields and capital appreciation.

Investing in the next up-and-coming market will always be the best bet, but it’s vital to get in at the right time, which is why so many investors now choose to buy off-plan units in order to secure the best price and generate the highest returns.

However, while London was once the go-to place for many looking to make fast money from property, things have now changed, and Totally Money’s latest research backs this up as its list of top places for rental yields is dominated by the north of England. According to the data, here are the top 10 places in the UK to see more from your money:

Rank Postcode Postcode Town Properties
for Rent
Average
Monthly
Rental
Value
Properties
for Sale
Average
Asking 
Price
Yield
1 L7 Liverpool 276 £1,162 64 £118,225 11.79%
2 L6 Liverpool 287 £1,046 131 £108,940 11.52%
3 TS1 Middlesbrough 234 £595 102 £65,238 10.94%
4 EH8 Edinburgh 52 £1,962 33 £221,640 10.62%
5 M14 Manchester 787 £1,636 72 £194,733 10.08%
6 NE6 Newcastle upon Tyne 883 £883 237 £111,767 9.48%
7 L1 Liverpool 217 £953 411 £122,152 9.36%
8 PR1 Preston 675 £903 586 £125,341 8.65%
9 M19 Manchester 75 £1,331 67 £185,645 8.60%
10 FY8 Blackpool 80 £1,490 252 £209,556 8.53%

Top locations for landlords

Liverpool proves once again to be a top place for investors to make healthy returns, with the L7 and L6 postcodes both generating impressive yields of more than 11%. And while Manchester has been a successful and lucrative place for buy-to-let for a few years now, the city is still going strong with two postcode areas (M14 and M19) in the top 10, and it was recently named the best place to be a landlord by GoCompare.

Preston has also made it onto the list again, with huge rental yields of 8.65% in the PR1 district, and with average asking prices of just £125,341 – well below the national average – it can be a great starting point for investors and buy-to-let landlords who are new to investing or don’t have a lot of capital. It is a popular destination for students with the University of Central Lancashire located in the city as well as some colleges, meaning demand for rental property, like in Liverpool and Manchester, will always be high from students and graduates, as well as young professionals.

Totally Money’s Joe Gardiner said: “Landlords need to go into property investment well-armed: they need to be on top of their credit rating, compare the best buy-to-let mortgage rates, and focus on property investment in areas that can give them the highest yield.”

Places to avoid…

Out of the 580,000 properties analysed by Totally Money, the worst places to be an investor in terms of rental yield have also been revealed. Somewhat surprisingly, London has seen the biggest fall from grace, with four of the capital’s postcodes appearing in the bottom 10 list.

Rank Postcode Area Properties
for Rent
Average
Monthly
Rental
Value
Properties
for Sale
Average
Asking
Price
Yield
1 BL6 Bolton 47 £588 239 £306,726 2.30%
2 NW5 London 211 £1,962 224 £1,026,913 2.29%
3 HP9 Hemel Hempstead 40 £2,721 95 £1,424,373 2.29%
4 TW20 Twickenham 373 £1,501 230 £788,163 2.29%
5 SE1 London 1102 £2,546 1310 £1,344,885 2.27%
6 SE24 London 39 £1,600 87 £849,195 2.26%
7 W8 London 1132 £5,445 341 £2,895,440 2.26%
8 SA3 Swansea 37 £830 392 £442,569 2.25%
9 BR7 Bromley 45 £1,365 134 £729,603 2.25%
10 LS18 Leeds 57 £602 127 £322,954 2.24%

With the BL6 area of Bolton coming up with the lowest rental yields in the UK of just 2.3% on average – perhaps due to the relatively high average asking prices of £306,726 which leaves less room for profit – north-west London fared similarly badly with 2.29% average yield. Hemel Hempstead and Twickenham, which are both within the capital’s commuter belt, also offer very low returns, with the only other northern area being LS18 on the outskirts of Leeds.