Landlord News

Where are the BTL Hotspots?

Rose Jinks - July 19, 2018

Due to 84% of private tenants being reportedly satisfied with their current accommodation, in addition to 68% being fairly satisfied according to the Government’s English Housing Survey, it is no surprise that the letting market is appearing more appealing for buy-to-let investors. The question is, where are the current BTL hotspots?

When considering rental yields, Luton and Colchester have recently been deemed the best places for buy-to-let investors in the market.

LendInvest BTL Index regularly ranks 105 postcode areas surrounding England and Wales.

Based on the combination of four metrics including capital value growth, transaction volumes, rental yield and rental price growth. The findings revealed that Luton is the top hotspot for the third time since December 2016.

Birmingham and Romford in Essex reportedly present fundamental investment opportunities for buy-to-let landlords, with rental returns marginally higher than Manchester.

Sales Director at LendInvest, Ian Boden commented: “It’d be so easy to look at the underlying data that tells us transaction volumes are down and make dire predictions about the health and wealth of the rental market.

“Instead, what our Index proves once again is that looking at one metric in the housing market is never enough. One metric on its own can’t clearly define the performance of a city’s property market.

“Each of the very top performing BTL locations this quarter is experiencing a slowdown in transactions – substantial falls in places, dips in others. But, the best places this quarter continue to outperform the competition well thanks to strong performances on other, equally important metrics like rental yield, capital gains and rental price growth.

“Data from the BTL Index, UK Finance and our own experience as a mortgage lender strongly suggests that right now a ‘buy, hold and remortgage’ strategy is some investors’ preference while the market works through a possible slowdown.”

Specifically, the top 10 buy-to-let postcodes are as follows, beginning with yield, followed by capital gain, followed by rental price growth and lastly, transaction volume growth:

Luton 3.91% 7.29% 3.70% -6.15%
Colchester 3.63% 6.33% 4.77% -6.73%
Romford 4.09% 4.99% 5.28% -7.84%
Birmingham 4.55% 5.00% 3.66% -6.46%
Manchester 5.36% 4.38% 3.71% -7.35%
Cambridge 3.26% 4.57% 4.76% -6.63%
Northampton 3.99% 6.59% 2.17% -7.36%
Bristol 3.83% 5.51% 2.75% -6.20%
Ipswich 3.42% 5.77% 2.76% -6.16%
Southend-on-Sea 3.62% 6.05% 2.53% -6.93%

Revealed as the bottom 10 buy-to-let postcodes are the following:

East Central London 2.86% -13.86% -0.20% -7.27%
Durham 4.41% -3.03% -2.81% -8.21%
Cleveland 4.23% -2.29% -0.70% -6.58%
Crewe 3.61% -2.30% 0.30% -7.45%
South West London 2.89% -0.07% -0.96% -7.94%
Sunderland 5.29% -3.18% -0.77% -6.15%
West Central London 2.61% -1.69% 0.87% -6.91%
Twickenham 3.38% 2.51% -2.32% -7.33%
Blackburn 4.69% -1.92% 0.55% -6.54%
Lancaster 3.79% 0.90% -1.52% -6.00%