In the ever-evolving UK property market, identifying the best buy to let areas is a crucial task for any astute investor. With numerous factors influencing rental yields and capital growth, there’s a lot to consider. In this blog article, we explore some of the top investment areas in the UK offering promising buy to let opportunities for 2023.
Top Buy to Let Investment Cities
Manchester – Topping Aldermore’s top 10 buy to let city list, Manchester’s rental market remains resilient and appealing to investors. With significant investment in infrastructure and a booming tech sector, Manchester is drawing young professionals from across the country and beyond, creating an ever-increasing demand for rental properties. Properties in the city centre and surrounding suburbs offer high rental yields, making it an excellent choice for buy to let investments.
London – London, despite witnessing a drop in recent years, has climbed the ranks remarkably, ascending from 6th to 2nd place. The illustrious capital continues to command the highest average room rents, although its short-term yields stay relatively low at 5.1%. However, the demand and scale of the private rental market in London remain robust at 29%, exceeding the national average of 21%.
Buy to Let in the South West
Bristol – Down from 1st to a still very respectable 3rd place, Bristol continues to perform well and is the highest ranking South West area in the Aldermore Best buy to let tracker. According to Dataloft Inform, over the last 12 months, the average rent achieved for homes let in Bristol was £1,223 per month. This is a +15% change on the previous 12 month period.
East of England Buy to Let Opportunities
An unheard of 7 locations from the East of England have found their way into the Top 20 Best buy to let areas for 2023: Cambridge, Peterborough, Luton, Southend, Basildon, Norwich, and Chelmsford. Each of these towns/cities demonstrated a compelling track record for attractive long-term returns during the last year. Southend, in particular, outshone all other places featured in the list, boasting the highest average annual increase in house prices, a noteworthy rise of 5.9%.
Buy to Let top performers in the South East
Milton Keynes – Milton Keynes has made an impressive leap, scaling a remarkable 28 places to secure the 6th position in the Aldermore rankings. The city witnessed a rise in property price growth from 4.6% in 2021 to 5.6% in 2022. Its above-average rental values have rendered Milton Keynes an increasingly attractive prospect for buy to let investors seeking to broaden their portfolios.
Reading – Staying consistent Reading is ranked at position 8 in the Aldermore rankings, one place higher than last year. Dataloft Inform states that during the period May 2022 to April 2023 the average rent achieved for homes let in Reading was £1,231 per month. This is a +12% change on the previous 12 month period.
Midlands Buy To Let
Coventry –Coventry has just managed to secure a spot in the top 10, rising from 12th place. This city has become the best-performing location for buy to let investors in the West Midlands. Over the last 12 months, the average rent achieved for homes let in Coventry has increased by *4%. (*Dataloft Inform data as of April 2023)
Nottingham – although it didn’t break into the top 10 and currently sits at 15th position, Nottingham is undoubtedly the top performer in the East Midlands. Home to two highly acclaimed universities and a growing student population, Nottingham has a steady demand for rental accommodation. During the last 12 months, the average rent achieved for homes let in Nottingham was *£862 per month. This is a +9% change on the previous 12 month period. (*Dataloft Inform data as of April 2023)
North West Buy to Let top Performers
As already mentioned at the start of this article, by far and away the best buy to let area in the North West of England, according to the Aldermore list, is Manchester. The next entry in the list is Liverpool who appear in 30th place.
Yorkshire Buy to Let
With 7x Yorkshire towns or cities in Aldermore’s top 50 list, clearly Yorkshire is a strong consideration for investors in the north. The highest of which is York in 22nd place. With Hull (34), Wakefield (35), Barnsley(36), Leeds (39), Doncaster (41), Bradford (45) and Sheffield (47) also appearing.
Buy to Let in the North East
The only 2x locations to make the Aldermore list for the North East are Newcastle (37) and Sunderland (48).
Buy to Let in Scotland
Glasgow (17) Edinburgh (21) are the top ranking Scottish areas in the Aldermore top buy to let areas for 2023 list, with Aberdeen (44) also making the list.
Buy to Let in Wales
Cardiff (43), Newport (49) and Swansea (50) are the top Welsh areas to appear on the Aldermore top 50 list.
Making the most of the Best Buy to Let Areas in the UK 2023
There are some fantastic opportunities in 2023 for buy to let investors, but it’s important to remember that property investment should be viewed as a medium to long-term venture. Thorough research, including analysis of local property markets, rental demand, and future developments, is essential. Understanding the nuances of being a landlord is equally crucial. From rental yields to tenant rights, it’s essential to comprehend the obligations and potential rewards involved in a buy to let investment. Partnering with a knowledgeable estate agent like Belvoir can make the journey smoother and more profitable. If you are considering expanding your property portfolio, why not talk to one of our local property experts, we are here to help.
Notes about the Sources quoted in this article.
The Aldermore 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.
Dataloft Inform are an established property market intelligence company with a long track record of analysing and reporting on the housing market.
