Oxford, Manchester, Edinburgh and London were named the top cities to be a landlord, but deciding what you’re looking for from your property investment is key.
Despite more challenging tax rules and regulations, landlords and investors are still finding ways to be successful in buy-to-let, and location is key. Aldermore’s Buy-to-Let City Tracker revealed the best British cities to be a landlord by assessing and analysing important categories, such as average house prices, monthly rental costs, yields, capital growth, vacancies and percentage of the city’s population that rents.
Damian Thompson, director of mortgages at Aldermore, stated: “Aldermore’s Buy to Let City Tracker shows there are still great short and long-term investment opportunities for landlords.
“The number of people renting in the UK has been rapidly growing, up 1.7 million in ten years, so private landlords are an increasingly central part of the housing market as supporting a robust and strong Private Rented Sector becomes more essential.”
In the tracker, Oxford was named the top place to be a landlord. More than a quarter of the city’s residents are renting, and rent costs an average of £596 each month. The average buy-to-let yield is 3.7%, but the downside of investing in this city is the high house prices with properties costing £511,695 on average. Many landlords in Oxford are making money through capital growth, but it’s important to note that short-term lets are typically not lucrative there.
Manchester is home to high yields and capital growth
As the second-best city to be a landlord in, Manchester has the best of both worlds with high yields, an average of 6%, and strong capital growth as property prices have grown steadily by 4% per year. Landlords have seen lucrative returns in both short- and long-term rentals across Manchester, offering more opportunities in the city’s buy-to-let sector.
Properties in this north-western city cost an average of £207,332, and 27% of the city’s population rents. As an additional 100,000 people are expected to be living in Manchester’s city centre by 2025, property investment in this thriving city is likely to continue to be lucrative for landlords and buy-to-let investors in the coming years.
London sees growing demand for rental properties
London was named the fourth best city to be a landlord as a quarter of the city’s population rents. The average price of renting a room per month is £630, which is the highest rental cost in Britain.
Additionally, the average property price in the capital is a whopping £617,238, while annual rental yields only come to 3%. Despite lower yields in the capital due to these high property prices, the growing demand for rental properties still make it an attractive city for landlords.
The top cities for landlords, according to Aldermore’s Buy-to-Let City Tracker, are:
- Oxford
- Manchester
- Edinburgh
- London
- Norwich
- Bristol
- Nottingham
- Cambridge
- Brighton
- Milton Keynes
As there are great areas to invest in long- and short-term buy-to-let properties across Britain, it’s important to find the right property and location to achieve your investment goals.
To find out about BuyAssociation’s property investment opportunities in cities that are great to be a landlord in, check out our investments page and sign up for more information.
