Investing in buy-to-let properties can be a profitable venture for landlords seeking to generate passive income through rental yields. However, with the diverse property market across the UK, determining the most profitable cities for buy-to-let investments can be a daunting task.
Below are the top three UK cities known for their strong buy-to-let rental yields, providing valuable insights for both seasoned investors and those considering entering the property market.
Cities with the best rental yield in the UK (2024)
1. Birmingham
As the UK’s second-largest city and with a fast-growing tech and financial sector, it’s no wonder that Birmingham is the city with the best rental yield in the UK.
Properties in Birmingham had an overall average price of £256,167 over the last year.
The majority of last year’s sold properties were semi-detached, achieving an average price of £264,071. Terraced properties fetched an average of £212,446, and flats sold for £151,649.
For the most part, last year’s selling prices in Birmingham were similar to the previous year with an 8% increase on the 2020 peak of £237,739.
2. Nottingham
Nottingham is known for its vibrant rental market, thanks to its substantial student population. And according to BBC News, the number of students is increasing. This is no surprise due to the University of Nottingham and Nottingham Trent University. Also, the Queen’s Medical Centre, the largest teaching hospital in the UK, is in Nottingham which draws in healthcare professionals and students.
Based on data from Rightmove, Nottingham properties had an average price of £240,864 in the past year. The most common type of property sold in Nottingham during this period was semi-detached, with an average price of £223,816, followed by detached properties at £359,717, and terraced properties at £172,222.
The sold prices in Nottingham remained steady compared to the previous year, showing a 9% increase from the peak in 2020, which was £221,915.
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3. Manchester
With five universities, Manchester has one of the largest student populations in Europe and boasts a vibrant academic scene. What makes it even more appealing is its property market, as properties can sell for up to 40% less than those in London, offering affordability without skimping on quality of life.
As reported by Rightmove, the average price of houses and flats in Manchester stood at £284,922 in the past year.
Most of the property purchases in Manchester last year were semi-detached houses, which were bought for an average price of £310,672. The average selling price of a terraced property was £231,897, and flats fetched £202,562.
