The success of your buy-to-let property investment strategy highly depends on the area you choose.
Some regions in the UK provide great Gross Rental Yield (GRY), whereas some provide moderate gross rental yield with good property value appreciation.
In this guide, we will cover a mix of buy-to-let areas in the UK that you should invest in 2024.
1. Top 3 buy-to-let areas in the UK to invest in 2024
Here are the top three buy-to-let areas in the UK that you should invest in 2024.
1. Manchester
Manchester city has shown a great increase in annual rental prices over the past five years. Not only that, but the city is going through some major developments. This indicates that the property value in the future, along with monthly rent, will only go up.
Some of the notable ongoing developments of the city include:
- The Ancoats Green project. This high-budget project aims to revitalise the Ancoats area, transforming the former bus depot into a vibrant green space. The public gardens, walkways, and community areas will significantly increase the property value of the neighbourhood by making it more desirable to live in.
- Another development perspective would be the MediaCityUK expansion. This £1bn expansion will bring more business job opportunities in the area. As a result, more young professionals would be looking to live in this area, making the demand for renting properties go higher.
Apart from these two, there are-
Both projects aim to create new urban centres, leisure facilities, commercial spaces, and so on, which improve the overall infrastructure of the area and increase the value of the properties.
2. London
Although the property prices in London are also on the higher side, you should take the opportunity of the recent price dip and invest in London properties in 2024.
Historically, the rent of London properties has always been high due to high property demand and a strong, diverse job market.
Plus, some ongoing infrastructure upgrades will again increase the value of the properties.
For example:
The Crossrail 2 (Elizabeth Line Extension), will improve connectivity across London, particularly in areas currently less well-served by public transport.
Better transport links always make an area more desirable, leading to increased property values.
Plus, multiple regeneration projects are being done across various locations such as:
- Meridian Water Regeneration Zone in North London,
- The Battersea Power Station,
- The Nine Elms in South London
3. Leeds
Pricing update: Average house price reached £232,000 in May 2024, up 1.1% year-on-year, lagging behind Yorkshire’s 3.9% increase. Private rents rose 7.2% annually to £1,102 in June 2024, slightly below the regional growth of 7.7%.
If you are looking for properties that are lower in price yet have good rental yield, Leeds will be an excellent option.
The lower property prices provide a lower entry point for investors.
However, due to a large student population (roughly 200,000) and working professionals, the demand for rental accommodations is high in this city, which makes it a perfect choice for investing in buy-to-let properties.
Besides, new housing development in Leeds hasn’t always kept pace with population growth. This limited supply, coupled with high demand, puts upward pressure on rents, benefiting investors.
Now know the value of your property investment with our free rental yield calculator.
2. Top 20 UK cities for buy-to-let rental yields
Gross rental yield (GRY) is the potential return you get on a rental property. It essentially tells you the annual percentage return you can expect on your property investment before factoring in any expenses.
Here’s how it works with an example:
Imagine you buy a buy-to-let property for £200,000.
You find a tenant who agrees to pay £1,200 per month in rent.
Annual rent = Monthly rent x 12 = £1,200/month * 12 months = £14,400
Now, to calculate the gross rental yield:
- Gross Rental Yield (GRY) = (Annual Rent / Property Price) x 100%
- GRY = (£14,400 / £200,000) x 100% = 7.2%
Knowing GRY is important for buy-to-let investors because-
- It helps you quickly compare the potential returns of different properties. So you can make the best investment decision.
- You can compare the GRY of potential investments to the average GRY in a specific area or the national average to understand how your potential investment stacks up.
- It helps you understand if a property aligns with your investment goals. Are you prioritising high rental income or capital appreciation (property value increase)?
Here are the 20 cities with the highest Ggross-rental-yield
| City | Average gross rental yield |
| Sunderland | 8.96% |
| Aberdeen | 8.03% |
| Burnley | 8.00% |
| Dundee | 7.96% |
| Glasgow | 7.95% |
| Middlesbrough | 7.92% |
| Blackburn | 7.52% |
| Hull | 7.45% |
| Newcastle | 7.45% |
| Liverpool | 7.44% |
| Stoke | 7.38% |
| Grimsby | 7.16% |
| Barnsley | 7.15%0 |
| Bradford | 7.02% |
| Blackpool | 6.98% |
| Wigan | 6.96% |
| Swansea | 6.92% |
| Preston | 6.91% |
| Rochdale | 6.85% |
| Bolton | 6.80% |
The top three cities with the highest GRY are:
- Sunderland
- Aberdeen
- Burnley
In the case of Sunderland, property price growth has been slower than in other areas in the UK, which means investors can acquire properties at a lower cost. At the same time, Sunderland University attracts a large student population, creating a consistent demand for rental accommodation, particularly flats and apartments. This high demand keeps occupancy rates and GRY high.
For Aberdeen, the economy is heavily dependent on the oil and gas industry. So, periods of industry slowdown can sometimes lead to a decrease in property prices, creating a potential buying opportunity for investors. However, at the same time, the demand for rental accommodation stays high due to the significant student population.
Burnley has a similar situation to Sunderland. Here, the rise of property prices is again slower, but the high demand for rental accommodations contributes to the higher GRY.
3. Top UK cities for buy-to-let investments by rent
If you are investing in a buy-to-let property, we are assuming that your primary ROI-generating strategy is through rent. In that case, you need to buy properties in areas where the average monthly rent is on the higher side.
Here are the top 10 cities in the UK with the highest average monthly rent:
| City | Average monthly rent |
| Portsmouth | £1,161 |
| Southend | £1,152 |
| Luton | £1,145 |
| Southampton | £1,121 |
| Cardiff | £1,119 |
| York | £1,111 |
| Manchester | £1,070 |
| Norwich | £1,065 |
| Hastings | £1,016 |
| Coventry | £1,015 |
Similarly, you would also want to avoid acquiring properties in the cities where the average monthly rent is the lowest.
Here are the 20 cities in the UK with the lowest average monthly rent:
| Data for the average monthly rent for properties in different cities | |
| City | Average monthly rent |
| Derby | £798 |
| Liverpool | £801 |
| Telford | £809 |
| Sheffield | £809 |
| Rochdale | £815 |
| Newcastle | £833 |
| Warrington | £863 |
| Swansea | £867 |
| Plymouth | £878 |
| Newport | £879 |
| Ipswich | £879 |
| Peterborough | £907 |
| Leicester | £924 |
| Birmingham | £934 |
| Gloucester | £945 |
| Nottingham | £947 |
| Glasgow | £951 |
| Swindon | £969 |
| Leeds | £969 |
| Northampton | £977 |
4. Average prices for buy-to-let properties in UK cities
In 2024, the average price of a buy-to-let property in the UK is around £261,897. But based on the city, the prices can range anywhere between £497K to £84K.
For example, the average price of a buy-to-let property in London city will be around £496,124. Whereas in Sunderland, it will cost you only £83,842.
But why such a huge difference?
You need to understand that the price of the property depends on supply and demand.
Locations with high property prices, like London, Oxford, and Cambridge, have a higher population. Plus, due to their globally popular universities, every year, a huge number of students move there, increasing the demand for rental accommodations.
Also, London, being the Capital of the UK, offers unmatched career opportunities, cultural attractions, and a diverse population. In addition to that, the land for development is limited, making the demand much higher than the supply. So, as a result, properties in London are priced the highest.
The scenario is almost the same for the other top locations. Oxford and Cambridge have prestigious Ivy League colleges that attract thousands of students, researchers, and professionals each year. However, to preserve their character and history, the cities have limited opportunities for development, which again makes property prices go high.
| City | Average price of a buy-to-let property |
| London | £496,124 |
| Oxford | £417,737 |
| Cambridge | £407,603 |
| Brighton | £360,102 |
| Reading | £309,293 |
| Crawley | £302,547 |
| Bristol | £294,503 |
| Aldershot | £290,646 |
| Southend | £268,305 |
| Milton Keynes | £266,589 |
| Bournemouth | £262,577 |
| York | £255,222 |
| Worthing | £254,618 |
| Edinburgh | £251,423 |
| Medway | £231,635 |
| Portsmouth | £226,802 |
| Hull | £98,617 |
| Middlesbrough | £92,862 |
| Burnley | £84,869 |
| Sunderland | £83,842 |
Property prices for cities like Sunderland, Burnley, and Middlesbrough are almost one-fifth of the price of the top three cities.
Now, why is it like that?
While the exact reason will vary from city to city, some common reasons will be the difference in availability and quality of amenities like school, healthcare, shopping, and entertainment.
Plus, cities like Sunderland have lower population densities compared to cities like London and the other top-tier ones. This lowers property demand and makes property prices cheaper.
5. Average prices for buy-to-let properties in different UK regions
Now, if you zoom out a little and move from city to region, you will also notice some patterns in property prices.
The region with the highest average price of a buy-to-let property is the London region (£516,295). This is mainly due to the reasons we discussed in the previous section (high demand and limited supply).
Meanwhile, the North East and the Scotland region (£109,072 to £127,284) offer the lowest average prices for investing in BTL properties.
| Region | Average price of a buy-to-let property |
| London | £516,295 |
| South East | £297,971 |
| East of England | £264,539 |
| South West | £240,472 |
| West Midlands | £182,531 |
| East Midlands | £176,730 |
| Wales | £164,388 |
| North West | £152,719 |
| Yorkshire and the Humber | £150,261 |
| Northern Ireland | £144,423 |
| Scotland | £127,284 |
| North East | £109,072 |
Now, you might decide to go with the regions with the lowest average for obvious reasons but consider some factors beforehand. While the GRY may be high for the lowest average regions, the long-term gain on the property might not be as good as the highest average ones.
From the charts below, you can clearly see that while the London region showed an average of 80% increase in property value in a decade, the Scottish region barely crossed 20%.
So, you need to invest in mid to high-range properties if your goal is to invest in a property that also gives you a good value appreciation over time.
6. Average gross yields and local authority rental yields in different UK regions
Now, if you are planning to go with a BTL strategy like BRRR (buy, refurbish, rent, refinance), your investment strategy should be different. You need to invest in regions where the average GRY is high, and the property acquisition cost is low.
Based on that, your best options would be the North East, Scotland, and Northwest regions.
By investing in multiple properties in these regions you can create a stable source of passive income through rents and expand your investment portfolio at the same time.
| Region | Average Gross Yield (%) | Local Authority | Gross Rental Yield (%) |
| North East | 7.65 | County Durham | 7.81 |
| Darlington | 7.52 | ||
| Gateshead | 7.75 | ||
| Scotland | 7.48 | Renfrewshire | 9.56 |
| East Ayrshire | 9.5 | ||
| West Dunbartonshire | 9.09 | ||
| North West | 6.66 | Burnley | 8.4 |
| Blackpool | 7.8 | ||
| Preston | 7.55 | ||
| Wales | 6.43 | Blaenau Gwent | 7.58 |
| Neath Port Talbot | 7.44 | ||
| Merthyr Tydfil | 7.4 | ||
| Yorkshire and the Humber | 6.38 | Hull | 7.45 |
| North East Lincolnshire | 7.16 | ||
| Barnsley | 7.15 | ||
| West Midlands | 5.95 | Stoke-on-Trent | 7.72 |
| Coventry | 6.66 | ||
| Newcastle-under-Lyme | 6.65 | ||
| East Midlands | 5.84 | Nottingham | 7.27 |
| Mansfield | 6.57 | ||
| Boston | 6.5 | ||
| South West | 5.37 | Plymouth | 6.39 |
| Gloucester | 6.28 | ||
| Swindon | 6.03 | ||
| South East | 5.34 | Southampton | 6.62 |
| Gosport | 6.46 | ||
| Portsmouth | 6.45 | ||
| East of England | 5.28 | Great Yarmouth | 6.42 |
| Peterborough | 6.24 | ||
| Fenland | 6.17 | ||
| London | 4.93 | Barking and Dagenham | 6.22 |
| Newham | 5.89 | ||
| Bexley | 5.68 |
7. What are the Average Buy-to-Let Loan Amounts for Fixed Rate Durations?
The average buy-to-let loan amounts vary based on fixed-rate duration, and the changes are as follows:
3-Year Fixed Rate (Purchase) at £183,894
Typically, these shorter fixed durations allow borrowers to access larger loans as lenders perceive them as lower risk due to the shorter repayment term.
5-Year Fixed Rate (Remortgage) at £154,625
This falls between the 3-year and 10-year fixed rates.
10-Year Fixed Rate (Remortgage) at £117,000
This reflects the generally lower loan amounts offered for longer fixed terms. Lenders often avoid extending large loans with fixed rates for longer periods due to potential interest rate fluctuations that could squeeze their profits.
Implications of Fixed Rate Durations on Loan Amounts:
- Higher Loan Amounts, Shorter Terms: Shorter fixed rates (3-year in this case) often come with larger potential loan amounts. This is because the shorter repayment term reduces the lender’s risk of significant interest rate rises during the fixed period.
- Lower Loan Amounts, Longer Terms: Conversely, longer fixed rates (10-year in this case) typically mean lower maximum loan amounts. Lenders are more cautious about offering sizable loans with fixed interest rates for extended durations, as they are exposed to the risk of interest rates falling and their profit margins shrinking.
Which one to choose?
Carefully consider the trade-off between fixed rate duration and loan amount when selecting a buy-to-let mortgage. A shorter fixed loan might let you borrow more, but it will also result in higher monthly repayments. Whereas a longer fixed rate might offer more stability in terms of monthly payments but it could limit the amount you can borrow.
So choose which one is more suitable for your needs.
👉Check out our blog featuring the best real estate books of 2024 that will empower you with the skills and knowledge needed to thrive in the property market
8. Average buy-to-let loan values across UK regions?
In March 2024, buy-to-let loan values showed significant regional differences. London led with average values of £272,052 for purchases and £223,000 for remortgages, highlighting its high property costs.
The South East followed with £208,922 and £174,380, respectively.
Meanwhile, the North East & Yorkshire had much lower values of £87,771 for purchases and £90,768 for remortgages, underscoring the affordability in this region.
| Regional Breakdown of Buy-to-Let Loan Value (March 2024) | |
| Region | Average loan value |
| London (Purchase) | £272,052 |
| London (Remortgage) | £223,000 |
| South East (Purchase) | £208,922 |
| South East (Remortgage) | £174,380 |
| North East & Yorkshire (Purchase) | £87,771 |
| North East & Yorkshire (Remortgage) | £90,768 |
Key takeaways: Best buy-to-let areas in the UK
Our key takeaway for investing in buy-to-let properties in the UK would be
- If you want good gross rental yield, invest in regions like- the North East, Scotland, North West, and Wales.
- If you want decent gross rental yield and good value appreciation over time, invest in regions like- South East and London.
If you are interested in starting a rent-to-rent business check out our ten-step plan to effectively start and manage your Rent to Rent business in the UK.
How Pluxa Property helps you get maximum return from buy-to-let properties in the UK
Pluxa Property can ease your buy-to-let property investment journey in multiple ways. We can provide you-
1. Expert Guidance
Our expert team has years of experience working in the UK property market. So, we can guide you through the process of selecting the ideal location and property type that aligns with your investment goals, focusing on areas with strong rental yields and capital appreciation potential.
👉 Contact our investment experts and find buy to let areas opportunities in the UK.
2. Alternative Investment Strategies
We specialise in serviced accommodation (SA), a unique approach to buy-to-let that can offer potentially higher returns compared to traditional buy-to-let.
While we can’t discuss serviced accommodation in detail here, you can learn more about this investment service here: Buy to serviced accommodation
3/ Streamlined Management
Even for traditional buy-to-let properties, Pluxa Property offers property management services (availability subject to location). This can free you from the hassles of tenant screening, maintenance coordination, and rent collection, allowing you to focus on the bigger picture of your investment portfolio.
Data sources
- https://www.zoopla.co.uk/
- https://www.uswitch.com/
- https://propertydata.co.uk/
FAQs about your property investment in buy-to-let areas
Q: What are the best buy-to-let areas in the UK for investment?
Some of the best buy-to-let areas in the UK will vary depending on the amount you can invest. If your budget is on the lower end, opt for regions like North East, Scotland, and North West. However, if you have a higher budget, you can go for locations like Cardiff, Your, Manchester, and other cities in the London region.
Q: What percentage of homes are privately rented across different UK regions?
The private rental market varies across the UK. In England, around 15% of homes are rented, with London exceeding 20%. Scotland and Wales have around 14%, while Northern Ireland sits at a similar percentage. The Northeast of England boasts the lowest proportion of rented properties.
Q: What other factors should I consider besides rental yield when choosing a buy-to-let property?
Apart from rental yield, the factors you should consider before investing in a buy-to-let property would be capital appreciation, rental demand, property type (student accommodation or for single or multiple families), void period, and location amenities like transportation, schools, and shops nearby.
Q: What other factors should I consider besides rental yield when choosing a buy-to-let property?
Besides rental yield, you should consider ongoing expenses like maintenance, property management fees, and potential repair costs. After accounting for all this and your mortgage repayment, the rent should still bring you some profit.
Peter Juhasz is the founder of Pluxa Property, the biggest property investment company in UK and Group CEO of AIP Capital Group and a property investment expert with over a decade of experience in the UK market.
He built a successful property company using innovative cashflow strategies like Serviced Accommodation and HMOs, scaling to 200 units in four years.
Peter leads a team specializing in property and business acquisitions across various sectors. A former co-host of “Cashflow With Property,” he shares his expertise in real estate investing and business scaling.
He is committed to continuous learning and helping SME owners and investors maximize their returns, driven by his passion for empowering others to achieve their financial goals.
To learn how Pluxa Property can help you in UK property investment, contact our experts.
