Best Buy-to-Let Hotspots for Landlords. (August 2022)

Britain’s biggest university towns and cities dominate the list of hotspot places to rent out buy-to-let homes (August 2022).

The rising star is the West Country city of Bristol, which takes the crown as Britain’s hottest buy-to-let area by jumping six places from the seventh spot last year in the Aldermore Bank city tracker for 2022.

Bristol scored highly for several factors - properties adding an average of 5.1 per cent growth yearly, low tenant voids (0.6 per cent), and a large rental market with 27 per cent of the population privately renting a home.

The famous university cities of Oxford and Cambridge took the next places.

Luton, Bedfordshire, was a top ten surprise thanks to an annual price growth that trumped Bristol by posting an annual 5.2 per cent increase.

Britain’s top 25 buy-to-let cities

London dropped slightly in the ranking but still figures in sixth place, down from third last year.

Meanwhile, last year’s winner, Manchester, is still hovering around the top position in fourth place.

Edinburgh and Glasgow prosper as good spots for buy-to-let as both cities have a relatively low number of private rented homes.

The Aldermore Bank study lists the top 25 places for buy-to-let landlords to invest:

Source: Aldermore Bank City Tracker 2022

Britain’s worst places for buy-to-let

The bank also looked at the worst areas for investing in buy-to-let.

The 10 not-spots were:

Source: Aldermore Bank City Tracker 2022

The bank says falling rents and an ample supply of homes exceeding tenant demand in Wales make the country less appealing to investors.

Separate research also looked at the best cities for shared houses (HMOs or houses in multiple occupation).

The top five cities were London, Birmingham, Bristol, Manchester and Leeds. The report explained each city had multiple universities and good job prospects for young professionals, which attracted HMO investors.

The scores looked at five factors: average rents, rental yield, price growth, tenancy voids and the size of the rental market in each area.

“Private landlords are central to the housing market, supporting over 4.5 million households. Our City Tracker shows the UK housing market is rich with diverse and unique conditions across the regions that are ripe for investment opportunities. I hope this analysis gives food for thought to many landlords on where to look for those hidden gems and returns that meet their business strategies,” said a spokesman for the bank.

Where landlords are investing

Separately, landlord insurer Simply Business looked at where landlords are buying homes to rent.

“London came top, followed by Birmingham, Manchester, Liverpool, and Glasgow. It’s interesting to note that the top five buy-to-let areas for new landlords are all major UK cities where tenant demand is likely to be high and property price growth likely to be steady,” said the report.

The remaining cities in the top 10 were Nottingham, Leeds, Bristol, Leicester, and Hull.

“All of these areas have well-known universities. Letting to students is often popular with new landlords due to the lower acquisition costs, annual demand, and potential for high rental yields,” said the insurer.