Buy-to-Let Rental Yield Map 2018/2019

Despite hurdles like changes to mortgage tax relief, the upcoming tenant fee ban, and revised renting criteria, landlords can still turn a profit on investment properties. Generous yields are there for the picking — if you know where to look…

To uncover which areas currently offer the highest buy-to-let yields in Q4 2018, we’ve analysed data from 580,000 properties across England, Scotland and Wales. Using the maps and our quick insights as a guide, new and experienced landlords can home in on where to make their next investment.

University hotspots are lucrative for landlords

For a buy-to-let safe bet, start looking for properties in university cities. Locations with a high student population, like Nottingham, Liverpool, Manchester, Leeds and the North East, boast some of the UK’s highest rental yields. Regular term times and a consistent, annual flow of new students puts landlords in a strong position: void periods are less likely, and with more students looking to rent, finding the right tenants is easier.

Nottingham

Liverpool

Manchester

Leeds

The North East

The best buy-to-let areas in Britain

Rank#
PostcodePC Postcode Town Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 NG1 Nottingham 44 £1,525 169 £152,631 11.99%
2 L7 Liverpool 149 £941 79 £115,398 9.79%
3 TS1 Cleveland 185 £543 96 £68,925 9.45%
4 L1 Liverpool 116 923 404 £118,754 9.33%
5 NG7 Nottingham 240 £1,187 168 £160,269 8.89%
6 NE6 North East 540 £834 216 £118,789 8.43%
7 NE1 North East 357 £1,095 157 £161,035 8.16%
8 S2 Sheffield 238 £853 117 £125,483 8.16%
9 SS1 Southend-on-Sea 100 £2,736 207 £409,233 8.02%
10 BD1 Bradford 153 £439 130 £65,889 8.00%
11 L6 Liverpool 181 £765 123 £116,995 7.85%
12 TS3 Cleveland 38 £431 75 £67,489 7.66%
13 L5 Liverpool 48 £668 122 £104,893 7.64%
14 SR1 Sunderland 117 £567 47 £90,347 7.53%
15 HD1 Huddersfield 171 £838 61 £134,246 7.49%
16 L3 Liverpool 208 £836 817 £134,803 7.44%
17 LS6 Leeds 799 £1,483 79 £239,505 7.43%
18 M14 Manchester 433 £1,265 95 £214,848 7.07%
19 DN31 Doncaster 39 £398 51 £68,301 6.99%
20 PR1 Preston 653 £845 606 £147,076 6.89%
21 M13 Manchester 110 £1,054 41 £183,551 6.89%
22 CF10 Cardiff 178 £1,024 143 £178,667 6.88%
23 S1 Sheffield 117 £727 135 £127,297 6.85%
24 AB11 Aberdeen 243 £660 68 £116,110 6.82%
25 L2 Liverpool 65 £854 294 £150,663 6.80%

Rental yields continue to be low in London

This may not come as a surprise. Property prices are forever high in London, dwarfing those in other areas across England, Scotland and Wales. As a result, buy-to-let landlords in the capital must make their property work harder to turn a profit.

Worst buy-to-let areas in London

Rank#
PostcodePC Area Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 N14 Southgate 169 £1,471 166 £677,527 2.61%
2 W8 Kensington 990 £5,791 350 £2,702,476 2.57%
3 N10 Muswell Hill 157 £1,753 267 £824,413 2.55%
4 SE1 Lambeth 818 £2,860 1231 £1,359,555 2.52%
5 W2 Paddington 1895 £3,801 1142 £1,819,405 2.51%
6 N2 East Finchley 200 £5,444 220 £2,716,759 2.40%
7 SW3 Chelsea 1310 £5,308 410 £2,656,193 2.40%
8 SW8 South Lambeth 424 £2,845 1074 £1,504,580 2.27%
9 N21 Winchmore Hill 90 £1,372 214 £743,284 2.22%
10 N6 Highgate 130 £2,469 255 £1,532,027 1.93%

To compare, here are the best London areas for a buy-to-let investment.

Best buy-to-let areas in London

Rank#
PostcodePC Area Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 E6 East Ham 151 £1,421 211 £354,162 4.81%
2 W6 Hammersmith 1189 £3,727 378 £999,465 4.47%
3 SE28 Thamesmead 69 £1,102 120 £296,439 4.46%
4 E15 Stratford 277 £1,690 491 £455,249 4.45%
5 SW1 Westminster 1440 £9,311 1119 £2,572,352 4.34%
6 E13 Plaistow 96 £1,418 237 £397,865 4.28%
7 E14 Poplar 1686 £2,252 2074 £631,946 4.28%
8 SW17 Tooting 318 £2,051 499 £578,098 4.26%
9 E4 Chingford 87 £1,613 340 £457,088 4.23%
10 NW3 Hampstead 1035 £5,761 717 £1,647,625 4.20%

The worst UK postcodes for buy-to-let yields

Rank#
PostcodePC Area Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 BH14 Bournemouth 65 £1,389 353 £704,370 2.37%
2 WD3 Watford 58 £1,363 204 £699,428 2.34%
3 BH13 Bournemouth 84 £2,408 211 £1,243,590 2.32%
4 DN22 Doncaster 34 482 258 £252,432 2.29%
5 GL54 Gloucester 31 £1,188 150 £625,333 2.28%
6 WF2 Wakefield 41 £535 252 £282,454 2.27%
7 BL7 Bolton 31 £701 135 £370,315 2.27%
8 SW8 London 424 £2,845 1074 £1,504,580 2.27%
9 HP16 Hemel Hempstead 31 £1,459 113 £772,860 2.27%
10 SA3 Swansea 51 £837 395 £443,971 2.26%
11 TF9 Telford 34 £557 254 £298,693 2.24%
12 N21 London 90 £1,372 214 £743,284 2.22%
13 BD23 Bradford 31 £664 43 £362,376 2.20%
14 NE46 North East 30 £587 103 £321,201 2.19%
15 BR7 Bromley 31 £1,337 160 £736,192 2.18%
16 GU29 Guilford 30 £1,270 91 £706,191 2.16%
17 YO11 York 30 £460 279 £258,363 2.14%
18 EN6 Enfield 58 £1,324 318 £744,922 2.13%
19 DY9 Dudley 30 £624 69 £352,599 2.12%
20 OX13 Oxford 30 £1,120 145 £640,713 2.10%
21 TW20 Twickenham 256 £1,374 238 £825,515 2.00%
22 WD7 Watford 42 £2,369 105 £1,429,283 1.99%
23 N6 London 130 £2,469 255 £1,532,027 1.93%
24 HP9 Hemel Hempstead 33 £2,366 89 £1,486,308 1.91%
25 CW12 Crewe 33 £582 189 £370,677 1.88%

Head of Brand & Communications, Mark Moloney, said: “Year after year, there’s a constant flux of students looking for somewhere to bed down for the night, so it’s no surprise that university cities offer landlords the highest buy-to-let yields. Demand is high, and landlords may use this as an opportunity to drum up competition between tenants and push rental yields higher.

“Landlords need to go into property investment well-armed: they need to be on top of their credit rating, compare the best buy-to-let mortgage rates, and focus on property investment in areas that can give them the highest yield. That’s where our map can help.

"And our free credit reportbuy-to-let mortgage comparison toolultimate guide to buy-to-let mortgages and in-depth guide to maximising profits from buy-to-let investment complete a suite of invaluable tools for landlords."

It seems the low rental yields that affect England’s capital don’t apply to Scotland’s. Five of the best buy-to-let areas in Scotland belong to Edinburgh postcodes. The pulling power of universities can also be felt here, with Glasgow and Aberdeen postcodes doing well.

Best buy-to-let areas in Scotland

Rank#
PostcodePC AreaArea Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 AB11 Aberdeen 243 £660 68 £116,110 6.82%
2 EH11 Edinburgh 51 £1,009 58 £182,399 6.64%
3 G20 Glasgow 30 £810 79 £146,841 6.62%
4 G12 Glasgow 62 £1,112 56 £208,838 6.39%
5 AB24 Aberdeen 322 £689 96 £131,134 6.31%
6 EH6 Edinburgh 73 £1,060 125 £204,295 6.23%
7 EH3 Edinburgh 138 £1,923 75 £373,044 6.19%
8 EH7 Edinburgh 80 £1,197 112 £238,446 6.02%
9 EH8 Edinburgh 33 £1,245 45 £249,304 5.99%
10 G3 Glasgow 39 £1,001 60 £202,303 5.94%

Worst buy-to-let areas in Scotland

Rank#
PostcodePC AreaArea Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 AB15 Aberdeen 164 £1,207 82 £353,398 4.10%
2 AB21 Aberdeen 55 £770 70 £228,616 4.04%
3 PH1 Perth 72 £629 214 £192,525 3.92%
4 EH4 Edinburgh 71 £1,177 112 £375,959 3.76%
5 DD11 Dundee 36 £512 83 £173,464 3.54%
6 PH2 Perth 54 £573 197 £209,219 3.29%
7 DD5 Dundee 33 £665 35 £263,163 3.03%
8 DD9 Dundee 32 £427 68 £172,151 2.98%
9 ML11 Motherwell 31 £501 172 £202,536 2.97%
10 DD8 Dundee 30 £494 72 £217,049 2.73%

Wales’ performance is a little more mixed. Unsurprisingly, Cardiff and Swansea postcodes claim eight of the top 10 hotspots. But it’s not all good news, because nine postcodes from these cities feature in the 10 lowest yielding results, too.

Best and worst buy-to-let areas in Wales

Rank#
PostcodePC AreaArea Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 CF10 Cardiff 178 £1,024 143 £178,667 6.88%
2 SA1 Swansea 455 £783 378 £157,395 5.97%
3 CF11 Cardiff 142 £870 228 £187,986 5.55%
4 SA31 Swansea 41 £881 151 £193,019 5.48%
5 SA5 Swansea 41 £597 193 £137,513 5.21%
6 CF37 Cardiff 210 £638 159 £152,603 5.02%
7 NP13 Newport 30 £398 96 £103,915 4.60%
8 CF31 Cardiff 31 £693 171 £183,182 4.54%
9 LL18 Llandudno 32 £605 254 £174,991 4.15%
10 SA6 Swansea 79 £510 222 £151,958 4.03%

Best and worst buy-to-let areas in Wales

Rank#
PostcodePC AreaArea Properties for Rent Average Monthly Rental Value Properties for Sale Average Asking Price Yield
1 SA73 Swansea 35 £539 149 £179,852 3.60%
2 CF62 Cardiff 34 £685 177 £240,116 3.42%
3 NP20 Newport 67 £555 160 £194,839 3.42%
4 CF5 Cardiff 53 £769 164 £273,524 3.37%
5 CF64 Cardiff 31 £972 172 £346,652 3.36%
6 SA18 Swansea 36 £498 271 £179,628 3.33%
7 CF14 Cardiff 139 £823 209 £316,483 3.12%
8 SA61 Swansea 33 £489 150 £190,742 3.08%
9 CF23 Cardiff 62 £874 135 £355,325 2.95%
10 SA3 Swansea 51 £837 395 £443,971 2.26%

Why are landlords feeling the squeeze?

The Autumn Budget’s changes to income tax personal allowance — along with the phasing out of mortgage tax relief — has caused some landlord’s tax bills to soar. Further rises can be expected over the next two years. From April 2020 all mortgage tax relief for landlords will be abolished. For some, this will see their tax bill more than double.

The next hurdle is the upcoming tenant fee ban, legislation for which has already been drafted. The upshot? It’s likely that landlord’s profit margins will be squeezed further as they’re left to absorb letting fees.

Buy-to-let mortgage criteria has also altered. Responding to legislation changes in September 2017, mortgage lenders ask for proof that rent prices will cover monthly mortgage payments, with some to spare. Lenders calculate the monthly repayment on an assumed rate of 5.5%. Rent must cover this figure by a surplus of 25–45%, making it harder for landlords to finance their property investments.

With so much change threatening landlord’s profits, it’s now more important than ever for them to maximise their rental yields. Our map makes it easy to spot where to get more bang for your buck.

For an idea of how lenders view you, sign up for your Free Credit Report. You’ll get clear picture of your credit rating and your borrowing potential, and signing up won’t harm your credit score. Your next stop should then be our buy-to-let mortgage comparison tool — designed to help you find the best buy-to-let mortgages.

Buy-to-let index

Buy-to-let yield is defined as average annual rent divided by average asking price.

Data is based on an analysis of 233,561 rental properties and 354,733 properties marketed for sale on Zoopla.

Postcodes require more than 30 properties for sale and 30 properties for rent to be included. Postcode map data collated from Wikipedia.