Our buy-to-let hotspot map looks at Great Britain’s best locations for high rental profits, and it couldn’t come at a better time.
Recent changes in interest rates and mortgage tax relief have squeezed rental profits harder than ever.
Some experts suggest raising rents to make up the deficit. While this can help, it’s by no means the only answer.
Rent increases must be fair. Inflation is often the best measure to judge this.
Given inflation is currently 2.8% for the last 12 months, it’s hardly going to make your pockets bulge.
It’s now more important than ever to think about other factors when it comes to your buy-to-let investment. And that’s where our buy-to-let hotspot map comes in useful.
In short, it seems university cities are where buy-to-let investments can do best.
But before landlords look to students to boost their rental profits, they might need to do some studying of their own.
When you break it down, it’s not hard to see why university cities outside London offer the best buy-to-let yields.
The in-flux of new arrivals replacing recent graduates makes the student market dependable year after year.
So, what student-friendly cities should you consider?
Liverpool postcodes L7, L6, and L15 rank among the top three places for rental yields, offering a 10.3%–12.6% return.
With three universities and a student population of 70,000, it’s not hard to see why Liverpool is so profitable.
Plymouth postcode PL4 comes fourth, with a 10.15% yield.
Manchester also features as a buy-to-let hotspot. M6 has an 8.25% yield and M14 nearly has an 8% yield.
The city boasts four universities and a student population of 100,000.
Look at the map for a full list of hotspots.
Is it surprising London postcodes rank low on the best buy-to-let returns table? House prices are high, meaning it’s harder for landlords to see a bigger return on their investment.
What’s more, competition is fierce; even the slightest rent reduction can see tenants flock to another property.
In particular, north London seems best avoided.
N2, N6, and NW11 feature in the bottom eight, with yields of just 1.5% to 1.9%.
Look at the map for a full list of low-yield postcodes.
A lack of data makes it hard to know how well Scotland fares for buy-to-let yields. Our research considers postcodes with more than 30 properties for sale and more than 30 properties to rent.
On the other hand, does a lack of properties for sale and rent show a fondness for living here?
Could Scotland be a potential buy-to-let hotspot?
After all, many landlords argue the best way to see a return on their investment is to have long-term tenants who pay their rent on time and look after the property.
But who knows? Look at the map and see for yourself.
If you’ve pinpointed a possible buy-to-let location, it’s time to think about your mortgage (if you need one).
Use our buy-to-let mortgage comparison tool to shop around for the very best deals.
The better deal you get, the more affordable your monthly repayments.
You can also get your free mortgage report. It shows you the best rates and mortgage options for your personal financial circumstances.