Buy to Let

Revealed: buy-to-let hotspots for portfolio landlords

Revealed: buy-to-let hotspots for portfolio landlords
Christina Hoghton
Written By:
Christina Hoghton

Manchester’s M14 postcode is the top buy-to-let hotspot in 2023, according to one lender.

The popular student area covers Manchester’s Fallowfield, Rusholme, Old Moat, and Ladybarn districts and is close to the University of Manchester and Manchester Metropolitan University.

According to Paragon Bank, landlords are attracted to the area by the high student population and can achieve rental yields of up to 7.5%.

The specialist buy-to-let lender analysed its lending data to reveal the top 10 locations for investment by portfolio buy-to-let landlords (those with four or more properties).

In second place was B29, covering the Selly Oak, Bournville, Edgbaston, Kings Heath, Northfield and Stirchley districts of Birmingham. This area is also home to a sizable student population, especially in Selly Oak, the location of Birmingham University. Close by in neighbouring Edgbaston is the Queen Elizabeth Hospital, a large local employer as one of the UK’s largest single-site hospitals.

Across the postcode yields of up to 6.9% can be generated.

The third most popular buy-to-let hotspot was DH1 in Durham where properties can deliver yields of up to 7.3%. The University of Durham’s Palatine Centre is located in Framwellgate Moor, contributing to the postcode’s popularity amongst students.

The top 10 buy-to-let investment locations are listed below, with average rental yields.

  1. M14 – Manchester, 7.50%
  2. B29 – Birmingham, 6.90%
  3. DH1 – Durham, 7.30%
  4. NG7 – Nottingham, 7.70%
  5. CF24 – Cardiff, 7.60%
  6. NE2 – Newcastle-upon-Tyne, 6.50%
  7. ST4 – Stoke-on-Trent, 9.10%
  8. LE11 – Leicester, 7.40%
  9. CW2 – Crewe, 8.70%
  10. BN2 – Brighton & Hove, 6.30%

Richard Rowntree, managing director at Paragon Bank, said: “Our data shows that portfolio landlords have a strategy of targeting major towns and cities across England and Wales, from Brighton and Hove on the south coast, up through the midlands and Wales and onto Newcastle.

“Something that links many of these diverse areas is their proximity to universities or large employers, such as the NHS or manufacturing and distribution hubs. This helps to illustrate the crucial role that the PRS plays in supporting further education provision and the workforce, both vital facets of the UK economy.”

Terraced properties lead the way

The analysis also found that terraced houses were the most popular investment property type in all of the top locations, except for CW2 in Crewe, where multi-unit freehold blocks of flats were preferred by landlords.