Insights for landlords

Looking to make a buy to let investment? Check out Manchester…

Mortgages 2 min read 07/02/2023

Manchester is the best city in the UK for buy to let investment, according to Aldermore's latest Buy to Let City Tracker.

The Northwest city came top due to its winning combination of high rental demand and robust property values. The average property price in Manchester has risen by an average of 5.6% every year since 2010, to its current level of £247.341. Demand for rented properties is strong, with 31% of the city’s residents privately renting, from students to young professionals and families.

When looking at buying new property, one key consideration is location. It may be tempting to purchase a buy to let property in the area you live in but think about whether there is a big enough market for tenants. That’s where Aldermore’s Buy to Let City Tracker comes in handy – with Manchester coming out on top.

Our Buy to Let City Tracker analyses a range of factors** to determine property hotspots for landlords, from average rent to house price growth and vacancies as a proportion of housing stock.

There are so many considerations when deciding to take the plunge and make a buy to let investment, questions such as how much deposit is needed for buy to let? And how do buy to let mortgages work? Our research intends to give you some insight when examining the right area to buy in.

The average monthly rent per room* in Manchester (£454) is also high compared to other towns and cities in the North West.

Arnold Henry, a landlord in Greater Manchester, said: “I am delighted to be part of the buy to let community in Manchester, which is consistently voted as one of the best places to live in the UK and beyond.

"I'm not surprised it's come top of Aldermore's Buy to Let City Tracker as the best place to rent out a property. Demand from tenants is currently very high in the city."

 

Capital returns

London came second in the list of best cities for landlords, after falling down the chart over the last few years.

The capital unsurprisingly has the highest average room rent in all of UK cities (at £660 a month) and it has a large proportion of private renters in proportion to the city population – 29%.

Yields in the capital are modest at 5.1% but property growth remains robust.

New entrants into the top 10 included Peterborough (5th) and Milton Keynes (6th).

The East of England performed strongly overall, with seven cities in the top 20, including Cambridge, Luton and Norwich.

Person looking out from high rise building

Least attractive cities for landlords

The bottom of the Buy to Let City Tracker table remained largely unchanged from a year earlier, with Sunderland, Newport and Swansea ranking as the least attractive major UK cities for buy to let investment.

Oxford fell from second place at the end of 2021 to 11th place in December 2022, due to a fall in average rents from £627 to £595, alongside lower overall returns and average yields in the city.

Northampton, Leicester and Derby also fell down the list his year, dropping to 24th, 28th and 32nd place, respectively.

Buy to let City Tracker chart 2022

See the full list of 50 cities in our latest Buy to Let City Tracker below, from the best for landlord investment to the least attractive:

  1. Manchester
  2. London
  3. Bristol
  4. Cambridge
  5. Peterborough
  6. Milton Keynes
  7. Luton
  8. Reading
  9. Southend
  10. Coventry
  11. Oxford
  12. Basildon
  13. Norwich
  14. Brighton
  15. Nottingham
  16. Birmingham
  17. Glasgow
  18. Southampton
  19. Swindon
  20. Chelmsford
  21. Edinburgh
  22. York
  23. Portsmouth
  24. Northampton
  25. Maidstone
  26. Plymouth
  27. Telford
  28. Leicester
  29. Bournemouth
  30. Liverpool
  31. Stoke
  32. Derby
  33. Wigan
  34. Hull
  35. Wakefield
  36. Barnsley
  37. Newcastle
  38. Warrington
  39. Leeds
  40. Belfast
  41. Doncaster
  42. Dundee
  43. Cardiff
  44. Aberdeen
  45. Bradford
  46. Wolverhampton
  47. Sheffield
  48. Sunderland
  49. Newport
  50. Swansea

 

*Average monthly rent per room is worked out using the estimated annual rent for an average property, divided by the average number of rooms per rental property in the city, divided by 12.

**Aldermore’s Buy to Let City Tracker was designed by Opinium and comprises five core indicators: average rent per room per month, short-term yield for a new buy to let purchase, average property price rise over the last 10 years, proportion of vacant properties in the city and size of the private rental market. The index uses a series of secondary data sources including the ONS, Census and other official housing statistics.