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Antony Antoniou – Luxury Property Expert

Best cities for buy-to-let investments revealed

Best cities for buy-to-let investments revealed Despite the recent tax and regulatory changes, buy-to-let continues to look an attractive income investment at a time of low-interest rates and volatile stock markets, but which city ranks best for buy-to-let investment?

Aldermore’s new Buy-to-Let City Tracker, which analyses 25 cities across the UK to understand the best places for landlords to invest in, has found that Oxford narrowly ranks number one, ahead of Manchester.

The Buy-to-Let City Tracker 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, the 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.

Oxford, which scored well on four out of five metrics, has one of the largest private sector markets of all 25 cities, with 28% of all residents in the city renting privately.

Oxford also offers above average rental ability, at an average of £596 per room per month, a low level of vacant properties, and security in investment with property prices having increased yearly by on average 4.8% the past decade.

The only sore spot is that short-term return through yield is one of the lowest on the list.

Damian Thompson, director of mortgages at Aldermore, said: “Aldermore’s Buy to Let City Tracker shows there are still great short and long-term investment opportunities for landlords.

“The number of people renting in the UK has been rapidly growing, up 1.7 million in ten years, so private landlords are an increasingly central part of the housing market as supporting a robust and strong Private Rented Sector becomes more essential.

“The UK housing market has never been a singular thing, instead made up of multiple smaller markets with their own unique conditions and challenges. There have been numerous regulatory changes recently and persistent economic uncertainty but this affects every region differently.

“Going forward, landlords will need continual backing and advice from lenders and the wider industry so they can provide choice, diversity of tenure and quality properties for renters.”

Aldermore’s Buy to Let City Tracker rankings table:

Ranking City Region Overall score
1 Oxford South East 74
2 Manchester North West 72
3 Edinburgh Scotland 72
4 London London 71
5 Norwich Eastern 66
6 Bristol South West 64
7 Nottingham East Midlands 63
8 Cambridge Eastern 63
9 Brighton South East 60
10 Milton Keynes South East 55
11 Plymouth South West 54
12 Hull Yorkshire 49
13 Leicester East Midlands 49
14 Coventry West Midlands 49
15 Southampton South East 48
16 Birmingham West Midlands 47
17 Liverpool North West 44
18 Cardiff Wales 39
19 Glasgow Scotland 37
20 Leeds Yorkshire 32
21 Derby East Midlands 31
22 Sheffield Yorkshire 30
23 Bradford Yorkshire 29
24 Newcastle North East 26
25 Wolverhampton West Midlands 25
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