Our latest Buy to Let City Tracker 2022 reveals Bristol ranks as the best city in the UK for buy to let investment.
Our Tracker looks at 50 cities and notable towns across the UK to help landlords understand the top places to invest in. We analyse and assess 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.
The latest wave of the research sees Bristol move into first place, knocking Manchester off the top spot from last year. Oxford takes second place followed by Cambridge, then Manchester and new-entrant Luton moves up to fifth place.
Bristol took the top by scoring highly across 4 of the 5 metrics, with particularly high scores on average annual change in house prices and % of properties vacant.
Mark Searle from Chartwell Funding tells us why he wasn’t surprised to see Bristol come out top:
“I wasn’t surprised to see Bristol top the rankings this year as I speak to numerous clients whose children came to study in Bristol and never returned home. The City itself is still growing with a steady supply of both new build and converted properties readily available and we have also seen investment in the rail and road infrastructure in and around The City. That aside, I genuinely believe Bristol is a great place to live with diversity around every corner, a great food and café culture and a friendliness that’s comes with a great blend of cultures”
Cambridge came third, scoring highly on average rent, average change in house prices and % of those who are renting,
Michael Taylor-Brown from Cambridge Money told us:
“I feel Cambridge performs consistently well in the Buy to let market mainly because of our prestigious University, Addenbrooke’s Hospital and the multitude of Blue-Chip Companies operating from the city. These are 3 significant pulls for the Cambridge Buy to Let market as this creates a high demand of professional prospective tenants looking to live and work in such a desirable location.”
And Vincent Burch from Vincent Burch Mortgage Services says: “We have seen direct evidence that Cambridge continues to perform well in the buy to let sector, and finance for HMOs is particularly sought after. With a large number of college campuses and the two universities, it is no surprise that affordable student accommodation continues to be in demand.”
Whilst Manchester scored highly on rental yields, it lost points this time on average rent per room and rental yields.
Richard Ignatowicz from Mortgage Savers told us:
“Manchester has seen a substantial influx of interest from southern and overseas based investors particularly since the BBC relocated to Salford Quays when investors realised that there was indeed “civilisation” ooop nooorf!
Despite significant price increases it is still good value for money as even now yields are a lot better than London and the Southeast so demand is not abating.
All types of buy to lets are in demand, from standard “bread and butter” terraced houses, particularly in east Manchester, to city centre apartments to HMO’s and particularly student lets as Manchester has one of the largest student campuses in Europe.”
Luton moved up seven places to take fifth place this time. It scored the highest on long-term return on property prices, and the proportion of residents who privately rent.
Damon Palmer, Director at TM Expert commented:
“Luton is on the London Commuter belt, with excellent road and rail links. It is home to the University of Bedfordshire, which creates a huge rental market for student lets. And there are large development opportunities already in operation, which will continue to make the town a vibrant place to live and work. In short, strong Capital Growth, decent rents, high rental demand and affordable property prices, make Luton a town with huge potential for property investment.”
Private landlords are a central part of the housing market, supporting over 4.5 million households in the UK. Our City Tracker shows the UK housing market is rich with diverse and unique conditions across the regions that are ripe for investment opportunities. I 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. And 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.
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.