5 Key Indicators Used To Discover Best Cities To Buy-To-Let

When choosing the best place to invest in buy-to-let property for you, yield is of course very important. After all, you’re likely to be investing in rental property to gain the best profits you can. However there are other factors involved and it’s important to base your choice of location on all of them.

Aldemore, a retail bank, have analysed 25 cities across the UK on 5 factors to determine the best location to purchase rental property. These 5 indicators were:

average total rent
short-term yield returns
long-term return through house price changes over ten years
proportion of empty properties
percentage of city population who are renting

Subscribe To Our Newsletter

So what are the scores?

Ranking	City	Score
1	Oxford	74
2	Manchester	72
3	Edinburgh	72
4	London	71
5	Norwich	66
6	Bristol	64
7	Nottingham	63
8	Cambridge	63
9	Brighton	60
10	Milton Keynes	55
11	Plymouth	54
12	Hull	49
13	Leicester	49
14	Coventry	49
15	Southampton	48
16	Birmingham	47
17	Liverpool	44
18	Cardiff	39
19	Glasgow	37
20	Leeds	32
21	Derby	31
22	Sheffield	30
23	Bradford	29
24	Newcastle	26
25	Wolverhampton	25

Oxford takes first place

It was a close call, but Oxford walks away with the top place for best UK city to buy-to-let. It achieved good scores on 4 out of 5 of the metrics, and has experienced rapid growth and investment. Oxford has one of the biggest proportions of people living in rental property, sitting at 28%. It also benefits from above average rental ability, low level of empty homes, and property prices increasing annually by on average 4.8% over the past decade. The only factor out of the 5 where Oxford came out one of the lowest on the list was short term return through yield.

Ever-popular London

In the top five, sitting in fourth place, is England’s capital. Property prices have risen faster in London than Oxford (5.5% compared to 4.8%), but annual rental yields are very low at just 3% thanks to high property prices.

Go To South England For Long Term Investment

Out of the top ten ranked cities, seven are in the south of England. Brighton and Oxford have seen a 4.8% increase in property prices, and Brighton has one of the largest market sizes in the UK at 28% of its population in private rental accommodation. In Milton Keynes, despite there being just 4.3% short-term yield and 17% of the population renting, there is only a low proportion of vacant properties at 1.8%.

Avoid Yorkshire (for buy-to-lets)

Three of the bottom six cities are part of Yorkshire. Sheffield is one of the cheapest for rental prices (average of just £324 per room), and has a lower than average yield of 5.3%. Bradford experiences a slow rise in property prices (1.6% per year) and a large number of void properties (4.1%). Despite these poorer ranked cities, Hull has done well at 12th place thanks to boasting the highest short-term yield of all 25 cities at 9.3%.

Mixed Midlands

The midlands contains cities of varying ranks. Nottingham sits at 7th in the list with an excellent short-term yield at 7.3% and 24% of the market live in private rental, which is just 1% lower than London. On the other hand, Wolverhampton sits right at the bottom in 25th place. It has the smallest rental market (just 12%) and as a knock-on effect has more vacant rental properties at 3.1%. Therefore, if you’re a landlord in Wolverhampton you may find that you struggle to find tenants for your property.