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

POSTED: 7th December 2021
IN: Newsroom
  • 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 21st in 2020 to 10th 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 (13th). 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 12th to 5th 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 6th 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 (20th) 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.                      

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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

 

 

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