Bristol claims top spot as best city for buy to let investment

Aldermore’s new Buy to Let City Tracker reveals Bristol as the best city in the UK for buy to let investment, climbing two places from last year
Glasgow is the first Scottish city to enter the top 10 since the Tracker began five years ago
New entrants Brighton (4^th), Portsmouth (7^th) and Basildon (9^th) jump up securing a place in the top ten

Aldermore’s Buy to Let City Tracker¹ has named Bristol, as the best city for landlords to invest in for 2024. Manchester, Coventry, Brighton and London make up the rest of the top five.

The Tracker analyses 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 Top 10 cities:

Ranking	2023	+/-change	2022 ranking	2021 ranking
1	Bristol	+2	Manchester	Bristol
2	Manchester	-1	London	Oxford
3	Coventry	+7	Bristol	Cambridge
4	Brighton	+10	Cambridge	Manchester
5	London	-3	Peterborough	Luton
6	Cambridge	-2	Milton Keynes	London
7	Portsmouth	+16	Luton	Northampton
8	Glasgow	+9	Reading	Brighton
9	Basildon	+3	Southend	Reading
10	Milton Keynes	-4	Coventry	Norwich

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

Bristol offers best all-round investment for buy to let investors

With good rental prospects, a high proportion of long-term private renters available and low number of properties currently vacant, Bristol jumped to the top of the leaderboard this year. Growth on returns is also an attractive lure for landlords with an annual increase of 6.6%. However, investing in Bristol isn’t for those looking to make a fast investment with short-term yields sitting at 4.4%.

Manchester dropped one place this year from the top spot, although the average rent per room is lower at £461, and the proportion of vacancies in properties is lower at 0.9% compared to the national average of 1.2%, long term returns are very appealing for landlords at +6.1% with a healthy market of tenants available (31%). Other cities in southern England also provided positive prospects for landlords including Brighton, London and Reading with higher average rents per room and strong demand from renters.

Scotland climbs into the top rankings

For the first time since the City Tracker was launched five years ago, a Scottish city has entered the top ten with Glasgow now in 8^th place. The city provides good rental returns for landlords at £471 and offers one of the highest short-term returns of 8.6%, higher than the average of 5.5%.

Tracker reveals average rent increases

The City Index Tracker shows the average rent per room has steadily increased, in 2021 the average room for rent was £423, while in 2022 it was £432 and this year increased to £455. Research by Aldermore² found that nine out of 10 landlords (94%) increased the rent they charge in the last 12 months. With the current position of the rental market, the research also revealed just under three quarters (73%) of landlords have seen an increase in tenant demand for their properties in the last year.

Wales continues to stay at the bottom

There was no change at the bottom of the leaderboard with Newport and Swansea remaining in 49^th and 50^th place. Properties in Newport provided the lowest rent return of £292 per room compared with the average of £455, although long-term yields looked more promising at +4.9%. However, Cardiff did climb a few places higher to make 40^th place, helped by a good proportion of private renters 25% available (compared to average of 22%) and low number of vacant properties, 1.0%.

Jon Cooper, head of mortgages at Aldermore, comments:

“Landlords have experienced an unprecedented year with rising interest rates, rising inflation, all while navigating their way through property legislation changes. Yet, the demand for rental accommodation has never been so high. Landlords play an important role in the UK economy, providing homes for those who are yet to get on the housing ladder or want to rent.”

“Usually, a few regions dominate the leadership board, but this year we see for the first time a wider range of areas making it into the top 10. We can see that each region is made up of multiple smaller markets with their own unique conditions and challenges. Landlords continue to do their research, working with their brokers to review their portfolios and ensure they are getting the best value for their properties, whatever obstacles may come their way.”

ENDS

Notes to editors

¹Aldermore’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.

Aldermore’s Landlord Survey was carried out Opinium amongst 500 landlords between 4-9^th November 2023

Aldermore’s Buy to Let City Tracker 2023 Top 50 Ranking Table:

Ranking	City	Region	Overall Score	2021 ranking
1	Bristol	South West	70	Manchester
2	Manchester	North West	69	London
3	Coventry	West Midlands	68	Bristol
4	Brighton	South East	67	Cambridge
5	London	London	67	Peterborough
6	Cambridge	East	66	Milton Keynes
7	Portsmouth	South East	66	Luton
8	Glasgow	Scotland	65	Reading
9	Basildon	East	65	Southend
10	Milton Keynes	South East	64	Coventry
11	Reading	South East	62	Oxford
12	Luton	East	61	Basildon
13	Peterborough	East	61	Norwich
14	Swindon	South West	61	Brighton
15	Northampton	East Midlands	60	Nottingham
16	Southend	East	59	Birmingham
17	Nottingham	East Midlands	59	Glasgow
18	Edinburgh	Scotland	58	Southampton
19	Norwich	East	58	Swindon
20	Maidstone	South East	55	Chelmsford
21	Birmingham	West Midlands	55	Edinburgh
22	Chelsmford	East	54	York
23	Belfast	Northern Ireland	53	Portsmouth
24	York	Yorkshire	53	Northampton
25	Wigan	North West	53	Maidstone
26	Hull	Yorkshire	50	Plymouth
27	Liverpool	North West	50	Telford
28	Oxford	South East	50	Leicester
29	Bournemouth	South West	50	Bournemouth
30	Derby	East Midlands	49	Liverpool
31	Southampton	South East	48	Stoke
32	Telford	West Midlands	48	Derby
33	Plymouth	South West	48	Wigan
34	Leicester	East Midlands	47	Hull
35	Leeds	Yorkshire	45	Wakefield
36	Newcastle	North East	41	Barnsley
37	Sheffield	Yorkshire	41	Newcastle
38	Doncaster	Yorkshire	41	Warrington
39	Barnsley	Yorkshire	39	Leeds
40	Cardiff	Wales	39	Belfast
41	Warrington	North West	39	Doncaster
42	Bradford	Yorkshire	38	Dundee
43	Wakefield	Yorkshire	36	Cardiff
44	Dundee	Scotland	35	Aberdeen
45	Stoke	West Midlands	35	Bradford
46	Aberdeen	Scotland	32	Wolverhampton
47	Sunderland	North East	31	Sheffield
48	Wolverhampton	West Midlands	28	Sunderland
49	Newport	Wales	18	Newport
50	Swansea	Wales	15	Swansea

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