Landlords in it for the long haul should invest in Bristol, which just saw returns grow by 6.6% annually, Aldermore’s Buy to Let City Tracker research says.
This is despite short-term yields only standing at 4.4% in the city.
Manchester is seen as the second most attractive location.
Although the average rent per room is lower at £461, and the proportion of vacancies in properties is lower at 0.9% compared to the national average of 1.2%, long term returns are very appealing for landlords at +6.1% with a healthy market of tenants available (31%).
Other cities in southern England also provided positive prospects for landlords including Brighton, London and Reading with higher average rents per room and strong demand from renters.
Jon Cooper, head of mortgages at Aldermore, said: “Landlords have experienced an unprecedented year with rising interest rates, rising inflation, all while navigating their way through property legislation changes.
“Yet, the demand for rental accommodation has never been so high. Landlords play an important role in the UK economy, providing homes for those who are yet to get on the housing ladder or want to rent.”
“Usually, a few regions dominate the leadership board, but this year we see for the first time a wider range of areas making it into the top 10. We can see that each region is made up of multiple smaller markets with their own unique conditions and challenges.
“Landlords continue to do their research, working with their brokers to review their portfolios and ensure they are getting the best value for their properties, whatever obstacles may come their way.”
Wales is seen as the worst investment location.
Newport and Swansea are ranked the 49th and 50th best investment spots, bottom of the lost.
Properties in Newport provided the lowest rent return of £292 per room compared with the average of £455, although long-term yields looked more promising at +4.9%.
However, Cardiff did climb a few places higher to make 40th place, helped by a good proportion of private renters 25% available (compared to average of 22%) and low number of vacant properties, 1.0%.
