Buy to Let City Tracker 2024: Bristol is Top City

Your landlord clients looking to expand their portfolios are likely exploring the country for the best areas to make their new investments, to discover which location will bring them the highest return.

We’ve done the research for you to share with them, and we found that Bristol is the place to be, closely followed by Manchester, Coventry, Brighton and London.

Aldermore’s Buy to Let City Tracker 2024¹ analyses five key indicators that impact buy to let desirability:

• Average total rent
• The best short-term returns through yield
• Long-term return through house price growth over the past decade
• The lowest number of vacancies as a proportion of total housing stock, and
• The percentage of the city population in the rental market

Aldermore’s Buy to Let City Tracker Top 10 cities:

Bristol offers best all-round investment

With good rental prospects, a high proportion of long-term private renters available and low number of properties currently vacant, Bristol jumped to the top of the leaderboard this year. Growth on returns is also an attractive lure for landlords with an annual increase of 6.6%. However, investing in Bristol isn’t for those looking to make a fast investment with short-term yields sitting at 4.4%.

Manchester dropped one place this year from the top spot, although the average rent per room is lower at £461, and the proportion of vacancies in properties is lower at 0.9% compared to the national average of 1.2%, long term returns are very appealing for landlords at +6.1% with a healthy market of tenants available (31%).  Other cities in southern England also provided positive prospects for landlords including Brighton, London and Reading with higher average rents per room and strong demand from renters.

Scotland climbs into the top rankings

For the first time since the City Tracker was launched five years ago, a Scottish city has entered the top ten with Glasgow now in 8^th place. The city provides good rental returns for landlords at £471 and offers one of the highest short-term returns of 8.6%, higher than the average of 5.5%.  

Wales continues to stay at the bottom

There was no change at the bottom of the leaderboard with Newport and Swansea remaining in 49^th and 50^th place. Properties in Newport provided the lowest rent return of £292 per room compared with the average of £455, although long-term yields looked more promising at +4.9%. However, Cardiff did climb a few places higher to make 40^th place, helped by a good proportion of private renters 25% available (compared to average of 22%) and low number of vacant properties, 1.0%.

Tracker reveals average rent increases

The City Index Tracker shows the average rent per room has steadily increased, in 2021 the average room for rent was £423, while in 2022 it was £432 and this year increased to £455. Research by Aldermore² found that nine out of 10 landlords (94%) increased the rent they charge in the last 12 months. With the current position of the rental market, the research also revealed just under three quarters (73%) of landlords have seen an increase in tenant demand for their properties in the last year.

Aldermore are here for Intermediaries

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Sources:

¹Aldermore’s Buy-to-Let City Tracker was designed by Opinium and comprises of 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.

²Aldermore’s Landlord Survey was carried out Opinium amongst 500 landlords between 4-9^th November 2023