WHICH ARE THE BEST BUY TO LET AREAS IN THE UK?
David Barr
December 19th, 2022
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Are you a want to be buy to let investor? You’ve likely landed here because your pretty open to investing across the UK and want to find the best value for money location to start your investment journey.
Currently the housing market isn’t having the best of times, but that may present some excellent opportunities for you, especially if you are looking to hold in the longer term.
In this article we’ve narrowed down what you should look for in a Buy To Let property, how you can go about narrowing down your search and some of our top recommended areas, as well as how we came to the conclusions.
Before we jump in and try to determine what area you should buy your rental property, there are a few other things that you might want to consider.
- Consider your budget
This goes without saying really, but you need to choose an area that is within your budget restrictions. You have to remember that this is a business investment, and you want the rental property income to exceed the initial cost, eventually.
When taking into account cost, it’s not just the upfront cost of the property – but the potential fees on renovations, insurances, legal fees, maintenance, stamp duty and more.
- Do you know the area?
If it’s your first buy to let property it can be beneficial to know the area, this knowledge is extremely valuable as you’ll have an idea of the nicer areas to purchase and ones which might attract better tenants – far more knowledge than if you had just been searching online.
- Yield
One of the main considerations you need to take into account is of course the yield. A rental yield is the revenue you earn or expect to earn from an investment, and you can calculate it on a property by dividing your rental income by the property value and multiplying by 100.
(Rental Per Calendar Year Income / Property Purchase Price)*100
- Will it attract quality tenants?
The final question you need to ask yourself is what kind of tenants will be attracted to the area. You can often determine this by what is actually in the local area, for instance if it’s close to a business park, then you’ll potentially attract professionals if there are good local schools, families, and so on. You might have an idea in mind of the types of tenants you want, so it helps researching the immediate local area.
If you’re pretty open to the location you want to invest your money, how do you go about narrowing it down? The UK is a pretty sizeable place, and you have lots of different options. Here’s a quick step by step guide on how we would typically narrow it down:
First take into account your preferences based on the above, is there a certain budget or area that you are interest in? This might automatically restrict where you can look at.
For all the areas of interest, try and find data on the average house price and average rental price to work out the average yield of the area. This isn’t the actual yield you will end up with, it will just allow you to look at the general areas your more likely to find a higher yield.
Once you have a few areas that have reasonable yields then we would recommend looking into them more – repeat the same process, but look at the type of property which present the highest yield, this will give you a good idea of what you want to look for.
We would advise at this point doing some more research on the areas you’ve chosen, looking at some of their districts or towns to find out which might be the most appealing to attract high quality tenants.
Now you can use all the information that you’ve gathered to look at the open market and find the best deals, or alternatively, let us handle it and sign up to our service!
OUR TOP RECOMMENDED BTL AREAS
We’ve looked into some of the top cities in England to determine which are the best areas to look into primarily in terms of yield, as all the other factors are personal preference.
1. Newcastle
Newcastle-upon-Tyne is a hotspot for Buy To Let investors, when looking into our research it represented an average yield of 6.77%, which is phenomenal as an average. In terms of average house price Newcastle is also quite an affordable area, especially if you look at buying a flat or terrace in the area as they come out at £137,783 and £174,451 as an average respectively.
Using PropertyData you can also narrow down the average rental yields per postcode, along with the average house prices to determine what your budget can stretch too. You can see that some of the best yields will come from the NE1, central area, but the asking price isn’t as high as you might expect – although the issue posed here is the volume of sales per month, which might pose a problem if you’re looking to invest quickly.
Newcastle is also a great area to invest as it’s a large business hub of the north, with thousands upon thousands of jobs and home to one of the biggest business parks in the UK. It’s constantly got a lot of regeneration ongoing and planned, so it’s a relatively safe bet when it comes to capital growth.
- Budget Required: Low
- Average Yield: 77%
2. Salford
Second in the list comes Salford, it’s a slightly higher value area than Newcastle, but the returns are still good in regards to yield. It sits just below Newcastle as an average with 6.68% yield – but as the values are higher this means that obviously, the rental fees are more.
We primarily like Salford as an area to invest because it is likely to continue increasing in price, and therefore fantastic for capital gains. There are several commercial developments in the area like The Salford Quays and Media City that are continually growing as business bases in the near future and attracting professionals to the area.
- Budget Required: Medium
- Yield:68%
3. Lancaster
Another area you can choose to invest in is Lancaster, It also represents a high yield and a price that sits in between the two areas we’ve previously suggested. The average yield in the area is 6.67%, very close to that of Salford, but the property prices are at an average of £262,976.
The Lancaster area has a large student population, you should definitely consider a student property or HMO to attract those types of tenants, as that’s where the most potential profit would typically be.
- Budget Required: Medium
- Yield:67%
4. Birmingham
England’s second largest city makes our list, Birmingham is a fantastic area to invest where you’ll never be short of potential tenants. For such a large city, the prices are fairly low – although the highest average in our list so far. The average rental yield in Birmingham is 6.55% with the average property value sitting at £269,811.
The city also have a ambitious “Our Future City Plan” that is aimed on some pretty significant developments up until 2040.
- Budget Required: Medium
- Yield: 55%
5. Manchester
Manchester is a very popular area to invest in, it’s a large city and it attracts such a wide range of different tenants, an investment market that is thriving significantly. In certain areas of Manchester, you can also achieve really high yields, but the average is pretty good as well at 6.4%. Manchester is the most expensive to buy a house on the list, however, with the average property value sitting at £280,692.
- Budget Required: High
- Yield: 4%
All of the information for this blog can be found on Home.co.uk and is correct as of December 2022.
You can find all the information around average yield, based on house prices and rentals in certain areas which we based our research on below:
| England Cities | Avg House Price (£) | Avg Rental (£) | Percentage (%) |
|---|---|---|---|
| Newcastle | 211,720 | 1,194 | 6.76% |
| Salford | 262,976 | 1,464 | 6.68% |
| Lancaster | 224,645 | 1,248 | 6.66% |
| Birmingham | 269,811 | 1,473 | 6.55% |
| Manchester | 280,692 | 1,497 | 6.39% |
| Exeter | 413,597 | 2,025 | 5.87% |
| Liverpool | 210,504 | 996 | 5.67% |
| Leeds | 265,792 | 1,252 | 5.65% |
| Cambridge | 536,141 | 2,492 | 5.57% |
| Southampton | 301,299 | 1,374 | 5.47% |
| Nottingham | 319,448 | 1,444 | 5.42% |
| Oxford | 570,297 | 2,574 | 5.41% |
| Stoke-on-Trent | 154,735 | 697 | 5.40% |
| London | 108,5127 | 4,770 | 5.27% |
| Bristol | 405,707 | 1,719 | 5.08% |
| Sheffield | 247,228 | 1,032 | 5.00% |
| Preston | 223,979 | 931 | 4.98% |
| Coventry | 289,248 | 1,200 | 4.97% |
| York | 401,078 | 1,654 | 4.94% |
| Milton Keynes | 395,597 | 1,613 | 4.89% |
| Bath | 554,319 | 2,209 | 4.78% |
| Hull | 184,373 | 722 | 4.69% |
| Lincoln | 262,602 | 1,025 | 4.68% |
| Derby | 278,570 | 1,076 | 4.63% |
| Bradford | 207,691 | 774 | 4.47% |
| Sunderland | 206,306 | 766 | 4.45% |
| Peterborough | 304,603 | 1,127 | 4.43% |
| Portsmouth | 332,993 | 1,231 | 4.43% |
| Gloucester | 307,309 | 1,116 | 4.35% |
| Chichester | 433,876 | 1,561 | 4.31% |
| Chelmsford | 406,126 | 1,438 | 4.24% |
| Chester | 322,443 | 1,140 | 4.24% |
| Brighton and Hove | 523,685 | 1,833 | 4.20% |
| Wolverhampton | 267,054 | 933 | 4.19% |
| Canterbury | 365,378 | 1,263 | 4.14% |
| Norwich | 339,307 | 1,171 | 4.14% |
| Truro | 353,338 | 1,148 | 3.89% |
| St Albans | 606,742 | 1,886 | 3.73% |
| Southend-on-Sea | 427,090 | 1,324 | 3.72% |
| Salisbury | 317,138 | 982 | 3.71% |
| Colchester | 367,136 | 1,136 | 3.71% |
| Leicester | 313,167 | 959 | 3.67% |
| Plymouth | 281,036 | 841 | 3.59% |
| Hereford | 300,782 | 894 | 3.56% |
| Doncaster | 215,266 | 605 | 3.37% |
| Lichfield | 344,352 | 961 | 3.34% |
| Wakefield | 293,775 | 781 | 3.19% |
| Winchester | 612,323 | 1,593 | 3.12% |
| Worcester | 311,190 | 777 | 2.99% |
Start your property portfolio today!
Are you a want to be buy to let investor? You’ve likely landed here because your pretty open to investing across the UK and want to find the best value for money location to start your investment journey.
Currently the housing market isn’t having the best of times, but that may present some excellent opportunities for you, especially if you are looking to hold in the longer term.
In this article we’ve narrowed down what you should look for in a Buy To Let property, how you can go about narrowing down your search and some of our top recommended areas, as well as how we came to the conclusions.
Before we jump in and try to determine what area you should buy your rental property, there are a few other things that you might want to consider.
- Consider your budget
This goes without saying really, but you need to choose an area that is within your budget restrictions. You have to remember that this is a business investment, and you want the rental property income to exceed the initial cost, eventually.
When taking into account cost, it’s not just the upfront cost of the property – but the potential fees on renovations, insurances, legal fees, maintenance, stamp duty and more.
- Do you know the area?
If it’s your first buy to let property it can be beneficial to know the area, this knowledge is extremely valuable as you’ll have an idea of the nicer areas to purchase and ones which might attract better tenants – far more knowledge than if you had just been searching online.
- Yield
One of the main considerations you need to take into account is of course the yield. A rental yield is the revenue you earn or expect to earn from an investment, and you can calculate it on a property by dividing your rental income by the property value and multiplying by 100.
(Rental Per Calendar Year Income / Property Purchase Price)*100
- Will it attract quality tenants?
The final question you need to ask yourself is what kind of tenants will be attracted to the area. You can often determine this by what is actually in the local area, for instance if it’s close to a business park, then you’ll potentially attract professionals if there are good local schools, families, and so on. You might have an idea in mind of the types of tenants you want, so it helps researching the immediate local area.
If you’re pretty open to the location you want to invest your money, how do you go about narrowing it down? The UK is a pretty sizeable place, and you have lots of different options. Here’s a quick step by step guide on how we would typically narrow it down:
First take into account your preferences based on the above, is there a certain budget or area that you are interest in? This might automatically restrict where you can look at.
For all the areas of interest, try and find data on the average house price and average rental price to work out the average yield of the area. This isn’t the actual yield you will end up with, it will just allow you to look at the general areas your more likely to find a higher yield.
Once you have a few areas that have reasonable yields then we would recommend looking into them more – repeat the same process, but look at the type of property which present the highest yield, this will give you a good idea of what you want to look for.
We would advise at this point doing some more research on the areas you’ve chosen, looking at some of their districts or towns to find out which might be the most appealing to attract high quality tenants.
Now you can use all the information that you’ve gathered to look at the open market and find the best deals, or alternatively, let us handle it and sign up to our service!
OUR TOP RECOMMENDED BTL AREAS
We’ve looked into some of the top cities in England to determine which are the best areas to look into primarily in terms of yield, as all the other factors are personal preference.
1. Newcastle
Newcastle-upon-Tyne is a hotspot for Buy To Let investors, when looking into our research it represented an average yield of 6.77%, which is phenomenal as an average. In terms of average house price Newcastle is also quite an affordable area, especially if you look at buying a flat or terrace in the area as they come out at £137,783 and £174,451 as an average respectively.
Using PropertyData you can also narrow down the average rental yields per postcode, along with the average house prices to determine what your budget can stretch too. You can see that some of the best yields will come from the NE1, central area, but the asking price isn’t as high as you might expect – although the issue posed here is the volume of sales per month, which might pose a problem if you’re looking to invest quickly.
Newcastle is also a great area to invest as it’s a large business hub of the north, with thousands upon thousands of jobs and home to one of the biggest business parks in the UK. It’s constantly got a lot of regeneration ongoing and planned, so it’s a relatively safe bet when it comes to capital growth.
- Budget Required: Low
- Average Yield: 77%
2. Salford
Second in the list comes Salford, it’s a slightly higher value area than Newcastle, but the returns are still good in regards to yield. It sits just below Newcastle as an average with 6.68% yield – but as the values are higher this means that obviously, the rental fees are more.
We primarily like Salford as an area to invest because it is likely to continue increasing in price, and therefore fantastic for capital gains. There are several commercial developments in the area like The Salford Quays and Media City that are continually growing as business bases in the near future and attracting professionals to the area.
- Budget Required: Medium
- Yield:68%
3. Lancaster
Another area you can choose to invest in is Lancaster, It also represents a high yield and a price that sits in between the two areas we’ve previously suggested. The average yield in the area is 6.67%, very close to that of Salford, but the property prices are at an average of £262,976.
The Lancaster area has a large student population, you should definitely consider a student property or HMO to attract those types of tenants, as that’s where the most potential profit would typically be.
- Budget Required: Medium
- Yield:67%
4. Birmingham
England’s second largest city makes our list, Birmingham is a fantastic area to invest where you’ll never be short of potential tenants. For such a large city, the prices are fairly low – although the highest average in our list so far. The average rental yield in Birmingham is 6.55% with the average property value sitting at £269,811.
The city also have a ambitious “Our Future City Plan” that is aimed on some pretty significant developments up until 2040.
- Budget Required: Medium
- Yield: 55%
5. Manchester
Manchester is a very popular area to invest in, it’s a large city and it attracts such a wide range of different tenants, an investment market that is thriving significantly. In certain areas of Manchester, you can also achieve really high yields, but the average is pretty good as well at 6.4%. Manchester is the most expensive to buy a house on the list, however, with the average property value sitting at £280,692.
- Budget Required: High
- Yield: 4%
All of the information for this blog can be found on Home.co.uk and is correct as of December 2022.
You can find all the information around average yield, based on house prices and rentals in certain areas which we based our research on below:
| England Cities | Avg House Price (£) | Avg Rental (£) | Percentage (%) |
|---|---|---|---|
| Newcastle | 211,720 | 1,194 | 6.76% |
| Salford | 262,976 | 1,464 | 6.68% |
| Lancaster | 224,645 | 1,248 | 6.66% |
| Birmingham | 269,811 | 1,473 | 6.55% |
| Manchester | 280,692 | 1,497 | 6.39% |
| Exeter | 413,597 | 2,025 | 5.87% |
| Liverpool | 210,504 | 996 | 5.67% |
| Leeds | 265,792 | 1,252 | 5.65% |
| Cambridge | 536,141 | 2,492 | 5.57% |
| Southampton | 301,299 | 1,374 | 5.47% |
| Nottingham | 319,448 | 1,444 | 5.42% |
| Oxford | 570,297 | 2,574 | 5.41% |
| Stoke-on-Trent | 154,735 | 697 | 5.40% |
| London | 108,5127 | 4,770 | 5.27% |
| Bristol | 405,707 | 1,719 | 5.08% |
| Sheffield | 247,228 | 1,032 | 5.00% |
| Preston | 223,979 | 931 | 4.98% |
| Coventry | 289,248 | 1,200 | 4.97% |
| York | 401,078 | 1,654 | 4.94% |
| Milton Keynes | 395,597 | 1,613 | 4.89% |
| Bath | 554,319 | 2,209 | 4.78% |
| Hull | 184,373 | 722 | 4.69% |
| Lincoln | 262,602 | 1,025 | 4.68% |
| Derby | 278,570 | 1,076 | 4.63% |
| Bradford | 207,691 | 774 | 4.47% |
| Sunderland | 206,306 | 766 | 4.45% |
| Peterborough | 304,603 | 1,127 | 4.43% |
| Portsmouth | 332,993 | 1,231 | 4.43% |
| Gloucester | 307,309 | 1,116 | 4.35% |
| Chichester | 433,876 | 1,561 | 4.31% |
| Chelmsford | 406,126 | 1,438 | 4.24% |
| Chester | 322,443 | 1,140 | 4.24% |
| Brighton and Hove | 523,685 | 1,833 | 4.20% |
| Wolverhampton | 267,054 | 933 | 4.19% |
| Canterbury | 365,378 | 1,263 | 4.14% |
| Norwich | 339,307 | 1,171 | 4.14% |
| Truro | 353,338 | 1,148 | 3.89% |
| St Albans | 606,742 | 1,886 | 3.73% |
| Southend-on-Sea | 427,090 | 1,324 | 3.72% |
| Salisbury | 317,138 | 982 | 3.71% |
| Colchester | 367,136 | 1,136 | 3.71% |
| Leicester | 313,167 | 959 | 3.67% |
| Plymouth | 281,036 | 841 | 3.59% |
| Hereford | 300,782 | 894 | 3.56% |
| Doncaster | 215,266 | 605 | 3.37% |
| Lichfield | 344,352 | 961 | 3.34% |
| Wakefield | 293,775 | 781 | 3.19% |
| Winchester | 612,323 | 1,593 | 3.12% |
| Worcester | 311,190 | 777 | 2.99% |
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