For landlords looking for the best places to invest in buy to let property, choosing the right area is key. In a fast-moving property market you need to be armed with the latest facts to stay a step ahead. Research shows that these are the best areas in the UK for buy to let in 2020 – which one will you choose for your next investment?
With lockdown restrictions gradually easing, you might be thinking of expanding your buy to let portfolio. It could be a great time to pick up a new buy to let property; major lenders in the buy to let mortgage market like Barclays and Skipton have cut rates, while the Chancellor Rishi Sunak’s stamp duty holiday makes buying a new rental property more affordable than it’s been in quite a while.
As all experienced landlords know, the location of your new rental property is key, and some UK towns and cities perform significantly better for landlords compared to the UK average. With competition for the best buy to let properties increasing in many areas, it’s key to be in the know about where to buy for the best return on your investment.
At The Landlord Link we’ve crunched the numbers from two of the biggest rental property surveys to find the best buy to let areas in the UK in 2020.
The top 15 UK towns and cities for buy to let investment
| UK area | Top postcode | Average property price | Yield | |
|---|---|---|---|---|
| 1 | Liverpool | L7 | £95,000 | 10.30% |
| 2 | Bradford | BD1 | £57,000 | 10.00% |
| 3 | Falkirk | FK3 | £62,450 | 9.51% |
| 4 | Sunderland | SR1 | £61,000 | 9.40% |
| 5 | Middlesbrough | TS1 | £56,000 | 8.80% |
| 6 | Glasgow | G52 | £82,000 | 8.71% |
| 7 | Kilmarnock | KA1 | £64,995 | 8.31% |
| 8 | Leicester | LE1 | £100,00 | 8.00% |
| 9 | Leeds | LS2 | £125,000 | 7.92% |
| 10 | Sheffield | S1 | £115,000 | 7.83% |
| 11 | Newcastle-upon-Tyne | NE6 | £128,000 | 7.80% |
| 12 | Pontypridd | CF37 | £125,000 | 7.70% |
| 13 | Cardiff | CF43 | £67,000 | 7.61% |
| 14 | Manchester | M14 | £177,000 | 7.60% |
| 15 | Edinburgh | EH8 | £215,000 | 7.60% |
Best areas in England for rental properties
Liverpool is still the best place in the UK overall to look for buy to let properties in 2020, with a range of postcodes across Liverpool seeing great yields. Landlords could see returns of up to 10.30% in the L7 postcode area which covers popular buy to let areas like Fairfield, Kensington and Edge Hill, while the city centre L1 postcode isn’t far behind at 10.00%.
Read our Liverpool buy to let guide >
Liverpool is the best area in the UK in 2020 for buy to let investors
Bradford is another emerging landlord hotspot with potential yields of 10.00% in the city centre. Low house prices (especially in comparison with nearby Leeds), regeneration projects and a university are all great reasons to choose rental property in Bradford. Look for properties in the BD1 area for the best returns.
The North East of England is still showing rich pickings for landlords looking for affordable, easy to rent property with good yields. The student hubs of Sunderland and Middlesbrough appear at numbers 4 and 5 in the rankings of the best places in the UK for buy to let, while the NE6 area in the west end of Newcastle-upon-Tyne appears at number 11. With yields of over 9% in the top areas of the North East, it’s no surprise that savvy investors are looking towards the Tyne and the Tees.
Best areas in Scotland for buy to let
Scotland continues to be a very strong option for landlords looking to pick up additional properties. The Scottish government have chosen to partly mirror the stamp duty holiday in England with a cut to the Scottish Land and Buildings Transaction Tax (LBTT) on property priced at under £250,000 until 31 March 2021.
Thriving Glasgow is a great option for landlords looking to expand their portfolio of properties.
While the Grangemouth area of Falkirk has the best rental yields in Scotland at up to 9.51%, many landlords will want to look at Glasgow, where a diverse range of postcodes across the city can achieve returns in the range of 7.1% to 8.71%.
Elsewhere in Scotland, Kilmarnock is increasingly popular with renters thanks to good commuter links to Glasgow. Landlords investing in the town’s KA1 postcode can expect yields of up to 8.31% with an initial outlay in the region of £65,000 for a typical rental property.
The EH8 postcode in Edinburgh looks an attractive prospect at 7.60%, although the initial investment is significantly higher than any other area on the list at an average £215,000 purchase price. If that’s too steep for you, consider Paisley as a location for your next portfolio property – yields in the region of 7.45% in the PA3 postcode just north of the town centre make it a reliable performer.
Looking to the north of Scotland, buying a rental property in the granite city Aberdeen could be a rock-solid investment. Aberdeen’s energetic economy continues to attract renters, and the city looks well-placed to ride out the economic shocks that 2020 has thrown at other areas in the UK. While landlords in Aberdeen may not be able to achieve the rental yields in double figures that they might see in Liverpool, the average yield in AB11 is still a very respectable 7.10%.
Best areas in Wales for landlords
It’ll come as no surprise to experienced landlords that the best areas for buy to rent in Wales are concentrated in the lucrative South East Wales area, and particularly around Cardiff. This part of Wales has been popular with landlords for several years now since the abolition of tolls on the Severn Bridge, giving residents easy access to both the Welsh capital and Bristol across the border. The effect is now spreading out from Cardiff and up into the Valleys.
Towns around Cardiff have been popular areas for buy to let investment thanks to great transport links.
The top postcode in Wales for landlords in 2020 is Pontypridd’s CF37. Cardiff is just 20 minutes away by train and this popular Valleys town has received millions in regeneration funding. Landlords who want to take advantage of rental demand in the area can expect up to a 7.70% return for an initial investment of around £125,000. Further north, the Ferndale area doesn’t have a train service but can offer tempting yields of around 7.61% and house prices here are far lower.
Are you considering one of these top areas for buy to let in 2020?
Data from Totally Money and Mojo Mortgages