Bristol Surpasses Manchester as Top Buy to Let City

Aldermore’s new Buy to Let City Tracker reveals Bristol ranks as the best city in the UK for buy to let investment
Oxford, Cambridge, Manchester and new-entrant Luton round out top five cities for buy to let opportunities
Norwich makes the biggest jump, climbing from 21^st in 2020 to 10^th this year
Swansea, Newport and Sunderland are ranked the least attractive of the UK major cities for buy to let investment

Aldermore’s Buy to Let City Tracker¹, an analysis of cities and a selection of noteworthy towns in the UK, has named Bristol, Oxford and Cambridge as the best cities for landlords to invest in for 2022.

The Tracker analyses and assesses five key indicators that impact buy to let desirability: average total rent, the best short-term returns through yield, long-term return through house price growth over the past decade, the lowest number of vacancies as a proportion of total housing stock, and the percentage of the city population in the rental market.

Aldermore’s Buy to Let City Tracker’s Top 10 cities:

Ranking	2021	+/- change	2020 ranking	2019 ranking
1	Bristol	(+6)	Manchester	Oxford
2	Oxford	(+2)	Cambridge	Manchester
3	Cambridge	(-1)	London	Edinburgh
4	Manchester	(-3)	Oxford	London
5	Luton	(+7)	Brighton	Norwich
6	London	(-3)	Northampton	Bristol
7	Northampton	(-1)	Bristol	Nottingham
8	Brighton	(-3)	Swindon	Cambridge
9	Reading	(+/-0)	Reading	Brighton
10	Norwich	(+11)	Milton Keynes	Milton Keynes

[Table of all 50 cities included in notes to editors]

*Scores comprises of five core indicators: average rent per room per month, short-term yield for a new buy-to-let purchase, average property price rise over the last 10 years, proportion of vacant properties in the city and size of the private rental market.

Jon Cooper, head of mortgage distribution, Aldermore comments:

“The City Tracker shows the UK housing market is rich with diverse and unique conditions across the regions that are ripe for investment opportunities. As we move towards a post-Covid environment, we hope this analysis gives food for thought to many landlords on where to look for those hidden gems and returns that meet their business strategies.

“Private landlords are a central part of the housing market, supporting over 4.5 million households in the UK and, as we emerge from the pandemic, landlords will need to meet the emerging demand for choice and variety from renters. With the economy opening up and EPC rating changes coming in 2025, now is a great time for landlords to talk with their broker to review where they want to take their portfolios in the future.”

Bristol offers best long-term investment for buy to let investors

Bristol has taken the top spot due to the long-term growth of property values in the area, and it has the lowest number of long-term property vacancies out of all 50 cities (at only 0.6% this year). With more than a quarter (27%) of residents estimated to be privately renting, creating a large and healthy market. Since 2010 property prices in Bristol have grown by 5.1% on average per year, second only to Luton (narrowly ahead with 5.2% annual price growth). This makes it much more likely that any buy to let investor will make a good return on selling any property later down the line.

The short-term picture, as with many of the cities ranked high in the Tracker, is more mixed. On one hand the average rent per room is £514 per month, up 12% on last year. This makes Bristol one of only nine cities in the UK to command a rental value of over £500 per month, and one of only two cities outside of the south and east of England, with the other being Edinburgh (13^th). However, any investor will need a large amount of money to invest. With the average property price in Bristol at £348,543, likely yield will only be 4.6% on their purchase, well below the 5.9% average across the 50 cities.

Luton flies into the top 10 for the first time

This year saw Luton enter the top 10 for the first time, rising from 12^th to 5^th place in the rankings due to the relative improvement in long-term house prices. With 5.2% year-on-year house price growth over the last decade, Luton now has the strongest property price growth of any of the 50 cities. This makes investing here an attractive long-term prospect for a buy to let investor.

London continues to fall

London has continued to slip down the leader board, now in 6^th place. However, the Capital continues to be an attractive investment due to the long-term outlook for property prices, market potential, and relatively high proportion of private renters.

Scotland showing signs of a good investment

Scotland’s competitive rental market remains a good investment for landlords. Edinburgh and Glasgow both sit within the Tracker’s top 20 and are particularly attractive to landlords looking for short-term yields. Glasgow (20^th) provides one of the highest average rents per room (9.1% - £422) but has a low proportion of vacant properties (1.1%). Edinburgh also benefits from a high percentage of private renters (86%) ensuring one of the highest rental returns of all cities (£546) but with a similarly small number of vacant properties (2.8%).

Wales continues to struggle

Buy to let properties in Wales continue to be less attractive than other locations due to a drop in rental prices and an increase of property vacancies, creating greater supply and therefore a challenging market for landlords. While Swansea provides some longer-term value compared with other cities in Wales, due to a 3.0% growth in property prices, Newport and Cardiff saw house prices drop along with their potential for short term yield.

Read out top tips:

**Ends**

Notes to editors

¹ Aldermore’s Buy-to-Let City Tracker was designed by Opinium and comprises of five core indicators: average rent per room per month, short-term yield for a new buy-to-let purchase, average property price rise over the last 10 years, proportion of vacant properties in the city and size of the private rental market. The index uses a series of secondary data sources including the ONS, Census and other official housing statistics.

For further information, journalists can contact our PR Team.

For further information about Aldermore, please review our Notes to Editors page.

Aldermore’s Buy to Let City Tracker rankings table 2021:

Ranking	City	Region	Overall score	2020 ranking
1	Bristol	South West	75	Manchester
2	Oxford	South East	73	Cambridge
3	Cambridge	East	70	London
4	Manchester	North West	69	Oxford
5	Luton	East	68	Brighton
6	London	London	68	Northampton
7	Northampton	East Midlands	67	Bristol
8	Brighton	South East	66	Swindon
9	Reading	South East	66	Reading
10	Norwich	East	66	Milton Keynes
11	Southend	East	65	Edinburgh
12	Coventry	West Midlands	61	Luton
13	Edinburgh	Scotland	58	Peterborough
14	Swindon	South West	56	Hull
15	Leicester	East Midlands	56	Portsmouth
16	Peterborough	East	56	Glasgow
17	Basildon	East	56	Southend
18	Portsmouth	South East	55	Plymouth
19	Southampton	South East	55	Telford
20	Glasgow	Scotland	55	Chelmsford
21	Plymouth	South West	54	Norwich
22	Derby	East Midlands	54	Maidstone
23	Chelmsford	East	54	York
24	Birmingham	West Midlands	53	Wigan
25	Bournemouth	South West	52	Coventry
26	Nottingham	East Midlands	52	Nottingham
27	Telford	West Midlands	52	Cardiff
28	York	Yorkshire	52	Birmingham
29	Hull	Yorkshire	52	Stoke
30	Wigan	North West	48	Barnsley
31	Maidstone	South East	48	Leicester
32	Stoke	West Midlands	47	Southampton
33	Liverpool	North West	46	Leeds
34	Milton Keynes	South East	44	Newcastle
35	Newcastle	North East	44	Bournemouth
36	Cardiff	Wales	40	Doncaster
37	Barnsley	Yorkshire	37	Bradford
38	Bradford	Yorkshire	36	Aberdeen
39	Aberdeen	Scotland	36	Derby
40	Warrington	North West	36	Warrington
41	Dundee	Scotland	35	Basildon
42	Leeds	Yorkshire	35	Liverpool
43	Belfast	Northern Ireland	33	Dundee
44	Wolverhampton	West Midlands	33	Sunderland
45	Wakefield	Yorkshire	32	Belfast
46	Sheffield	Yorkshire	31	Sheffield
47	Doncaster	Yorkshire	31	Wolverhampton
48	Sunderland	North East	31	Wakefield
49	Newport	Wales	21	Newport
50	Swansea	Wales	12	Swansea

Bristol knocks Manchester off top spot as best city for buy to let investment