Top 10 Areas for Buy-to-Let in the UK

The UK property market can only be described as turbulent in recent years: government tax policies change, mortgage interest rates fluctuate, and rents keep climbing. Yet, smart investors know how to take advantage of these market conditions, and buy-to-let is one strategy that never gets old.

With this strategy, you purchase a property to rent it out to tenants instead of living in it yourself. However, you can’t invest in just any house. Browse the top 10 areas for buy-to-let in the UK with relatively high rental yields, from Bradford to Sunderland, Glasgow, and more.

What Are the Top 10 Areas for Buy-to-Let in the UK?

The highest-yielding buy-to-let areas in the UK are mostly located in the North East and North West of England as well as Scotland. With yields as high as 12% and 11%, and average rents reaching £1,079 pcm, here are the top 10 locations to consider for buy-to-let:

1. Bradford

Highest postcode yield: 12%
Average asking price: £226,137
Average asking rent per month: £854 pcm

2. Sunderland

Highest postcode yield: 11%
Average asking price: £161,892
Average asking rent per month: £706 pcm

3. Glasgow

Highest postcode yield: 10.4%
Average asking price: £182,643
Average asking rent per month: £1,079 pcm

4. Hull

Highest postcode yield: 9.6%
Average asking price: £176,812
Average asking rent per month: £791 pcm

5. Leeds

Highest postcode yield: 9.4%
Average asking price: £288,252
Average asking rent per month: £1,134 pcm

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6. Newcastle

Highest postcode yield: 9.3%
Average asking price: £265,787
Average asking rent per month: £1,123 pcm

7. Sheffield

Highest postcode yield: 9.1%
Average asking price: £233,781
Average asking rent per month: £937 pcm

8. Aberdeen

Highest postcode yield: 9.1%
Average asking price: £208,639
Average asking rent per month: £799 pcm

9. Middlesbrough

Highest postcode yield: 8.8%
Average asking price: £185,800
Average asking rent per month: £706 pcm

10. Liverpool

Highest postcode yield: 8.1%
Average asking price: £211,088
Average asking rent per month: £971 pcm

Note: The highest postcode yield refers to the best gross yield in one postcode district. It’s not the average gross yield for a specific area.

How the Top 10 Areas for Buy-to-Let in the UK Compare to Other Locations

Here’s an overview of buy-to-let estimations in other UK areas so you can familiarise yourself with the property market across different parts of the country:

Location	Highest postcode yield	Average asking price	Average asking rent per month
Manchester	7.4%	£269,587	£1,317 pcm
Birmingham	7.1%	£274,692	£1,123 pcm
Edinburgh	7%	£326,118	£1,412 pcm
London	6.9%	£592,636	£2,226 pcm
East London	6.9%	£539,780	£2,148 pcm
North London	6.5%	£629,947	£2,248 pcm
South London	6.3%	£533,922	£2,127 pcm
Surrey	6.1%	£629,277	£2,081 pcm
West London	5.8%	£826,769	£2,717 pcm
York	5.4%	£366,155	£1,350 pcm

What Is Rental Yield and Why Is It a Relevant Buy-to-Let Factor?

Rental yield is the yearly return on investment (ROI) you get from renting out your purchased property, displayed as a percentage of its initial price or market value.

It’s an important buy-to-let indicator because:

– It helps you compare potential ROIs between two properties or locations.
– It allows you to estimate the future of your investment.
– It tells you if buying the property will align with your cash flow goals.

What Other Factors Should You Think About When Buying to Let in the UK?

While the rental yield is the first thing to consider for buy-to-let projects, it’s more useful when paired with more information about the property or area you’ll be investing in:

1.The cost of a buy-to-let mortgage
2. House price trends
3. Local rental market demand
4. Interest rate changes
5. Tax-related considerations

For buy-to-let property tips, read Martin Roberts’ expert guide.

FAQs

What is the difference between gross and net yield?

Gross and net yield are more specific calculations that fall under the general rental yield umbrella.

To get the gross yield, you have to divide annual rent by property value, then multiply the result by 100. Annual rent minus annual running costs, divided by property value, and multiplied by 100 will give you the net rental yield.

For investors, the net yield is the more accurate indicator of a buy-to-let property’s ROI, because it factors in the operating costs.

How much deposit do you need for a buy-to-let property?

In most UK areas, you’ll need 25% of the property’s value, although riskier investments (like new-build flats) may require deposits ranging from 30%–40%.

Another scenario where you might be charged a higher-than-usual deposit is if you have a poor credit profile.

In Conclusion: Surviving the Volatile UK Property Market

After reviewing the top 10 areas for buy-to-let in the UK, the next step is to educate yourself on how to wade through the constantly shifting property market with confidence.

Assets for Life is a leading property education and business training company that enables you to reach your investment goals. Since 2015, we’ve helped over 8,700 UK investors launch their dream property investment projects.

With various resources to choose from (webinars, free property events, and bootcamps), your buy-to-let ambitions should no longer appear far-fetched.