Profitable Buy-To-Let Hotpots in 2024

Buy-to-let investors are currently navigating a challenging market, with interest rates and inflation that are elevating the costs associated with being a landlord. Despite these challenges, the market offers strong rental growth and tenant demand BUT the landscape varies significantly from city to city, with rental yields ranging from a meagre 3.2% to a robust 8.8%.

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Bristol: A Buy-to-Let Gem

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Bristol claims the top spot as the best city in the UK for landlords, supported by Aldermore Bank's analysis. Beyond typical indicators like rental yields, researchers evaluated long-term house-price growth, rental market size, and vacancy rates. Bristol stands out with high average rents per room at £562 per month, 24% above the 50-city average. With annual house price growth at 6.6%, low vacancy rates (0.8%), and a 4.4% rental yield, Bristol is an attractive destination for property investment despite higher house prices.

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Manchester and London: Solid Performers in the Buy-to-Let Market

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Manchester secures a high position in our rankings, leveraging affordable homes and a growing population of young professionals seeking rental properties. With an average rent per room at £461 and a 5.2% yield, Manchester landlords benefit from strong demand, reflected in a mere 0.9% vacancy rate. In contrast, London, despite being lower in the rankings grapples with high house prices, resulting in a lower-than-average yield of 3.8% and recent slowdowns in tenant demand due to increased rental prices.

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Manchester’s Strength & Resilience

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Baljit Arora, managing director of agency Orlando Reid, emphasises Manchester's appeal with affordable homes and a robust market of young professionals. While the yield may be slightly lower than the average, the city's strong rental demand ensures lower vacancy rates, making it an attractive choice for landlords.

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Liverpool: A Hidden Gem in Buy-to-Let

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Despite its lower position in the rankings, Liverpool possesses unique qualities that make it a hidden gem in the buy-to-let landscape. The city's rich history, vibrant culture, and lower average house prices offer investors an opportunity for accessible entry into the market. Ongoing regeneration projects and infrastructural developments signal a positive trajectory for property values in the long run. While Liverpool may not top the current list, its dynamic character and investment potential make it a city worth considering for savvy investors looking beyond immediate yields.

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- Find out more about Manchester buy-to-let property investment

- Find out more about Liverpool buy-to-let property investment