Whether you’re looking to invest in buy-to-let for the first time or boost an existing portfolio, we can reveal the best locations for maximum profits.

Landlords have recently been hit by a raft of tax changes – including higher rates of stamp duty and restricted mortgage interest tax relief – making it more important than ever for investors to maximise rental yields to help cope with rising costs. 

The areas with the highest yields tend to be those with the lowest house prices. Six out of 10 of the cities with the highest rental yields also have some of the lowest house prices in the country. That’s because the yield is the annual rental return expressed as a percentage of the property’s value.

Cities with a strong student let market and coastal towns that benefit from holiday rentals dominate the list.

So, coming top is Liverpool with an average rental yield of 8 per cent. The average house price in the city is £122,283 and average rent is £1,021 a month, providing investors with a healthy return.

Nottingham is second with an average yield of 5.6 per cent. Here the average rent is £808 against a typical property value of £127,302. Coventry, in third place, has a yield of 5.4 per cent, with an average rent of £1,025 against a property price of £166,340, our research found.

Greater Manchester is fourth with a yield of 4.3 per cent, followed by Portsmouth in fifth place with 4.2 per cent, one of just three Southern locations to make the top ten.
Shaun Church, director of Private Finance, says: “It’s not only the residential property market that’s all about location, location, location.

“Many landlords will treat property as a long-term investment, looking for reward in the form of capital gain. Succeeding in making a long-term profit depends on buying an affordable property and being confident its value will appreciate at a higher rate than mortgage borrowing.

However, for more immediate returns, landlords can optimise rental yields by choosing their buy-to-let location carefully.
“Investors should look for areas with strong rental demand. Larger cities and university towns generally have better performing rental markets: this will help to avoid lengthy void periods that can damage landlords’ profitability. 

“Investors may also want to stay away from areas with very high house prices. Although these locations can provide high rental income, a large initial investment can prevent investors from achieving good returns.
“When purchasing with a mortgage, landlords should keep in mind that the larger the loan, the higher their mortgage costs. Now that tax relief on mortgage interest is being restricted, keeping mortgage costs down is particularly important. 

“The good news is all landlords are benefitting from ultra-low mortgage rates. An independent mortgage broker has access to products that might not be available if going it alone, and can help track down the most affordable and suitable option.”

Top 10 buy-to-let hotspots by average net rental yield


Average house price (Jan 17)

Average mortgage costs* (Annual)

Average rent 2017 (Monthly)

Average rent 2017 (Annual)

Net rental yield 2017 (excluding tax)



















Greater Manchester










































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