Student cities and employment centres are the leading hotspots for buy-to-let investments.
Cardiff, Birmingham, and Plymouth have emerged as key locations for buy-to-let investment, according to Paragon Bank’s 2024 lending data.
Cardiff’s CF24 postcode, covering areas like Cathays and Roath, topped the list, attracting landlords eager to accommodate the city’s large student population. Paragon reports that landlords in this area can achieve average returns of 8.7%.
Birmingham’s B29 postcode, which includes Selly Oak—home to the University of Birmingham and Queen Elizabeth Hospital—came in second. This area offers a mix of student and professional tenants, with yields around 7.5%.
BTL Investment Concentrations Neil Smith, head of surveyors at Paragon, commented: “Examining last year’s most popular postcodes among Paragon’s buy-to-let landlords shows a clear geographical concentration of investment.”
“Despite the shortage of privately rented homes across the UK, landlords are often strategic, focusing on areas with consistent demand, such as cities with large transient populations—students and temporary workers—alongside more permanent residents like young professionals and families.”
He also pointed out that buy-to-let landlords tend to invest in property types that yield strong returns, particularly terraced houses and HMOs.
“While focusing on specific tenant markets offers benefits, it’s smart to consider if a location could also attract other tenant groups, helping to keep investments profitable even if demand in the primary market decreases.”
Properties Popular with BTL Landlords Plymouth’s PL4 postcode, home to universities and the hospital, followed a similar trend to the top two, appealing to comparable tenant demographics, and offers the second-highest yield of 9.6%.
Other popular postcodes include LS6 in Leeds, NG7 and NG3 in Nottingham, M14 in Manchester, GL1 in Gloucester, as well as areas in Liverpool and Stoke.
Terraced houses were the most in-demand property type, except in Nottingham’s NG3, where flats were more popular with landlords.
