High interest rates and inflation are piling up the costs of holding properties, yet the robust growth in rental demand and prices offers a silver lining. However, this broad national overview masks the intricate patchwork of local markets, where the fate of landlords swings dramatically from city to city. The Daily Mail has produced a guide to the top 50 areas where buy-to-let profits are highest.

Bristol At The Top

Bristol emerges triumphant as the prime location for landlords, boasting the highest accolades in their comprehensive analysis by Aldermore Bank. This exploration delves beyond the customary rental yield metric to encompass factors like long-term property price growth, rental market size, and the prevalence of vacant properties. Bristol’s allure is echoed across a selection of cities that are redefining the buy-to-let boom, each offering unique market conditions and challenges that defy the traditional dominance of a few regions.

With an average rent per room at £562, Bristol outshines the national average by 24%, underpinned by a decade of solid house price growth at 6.6% annually. This vibrant city presents a low vacancy rate of just 0.8%, although the high property values temper rental yields to 4.4%, below the 50-city average of 5.5%. The appeal of Bristol, enhanced by its commutable distance to London and Birmingham, draws renters willing to trade off for more space and affordability, a trend bolstered by the flexible working arrangements post-pandemic.

Manchester and London

Manchester and London stand firm in the rankings, with Manchester securing the second spot and London fifth. Manchester’s appeal lies in its affordability and the burgeoning young professional population, despite offering a slightly below-average yield of 5.2%. London, on the other hand, faces challenges with tenant demand due to soaring rental prices and the high costs of buy-to-let mortgages, which have pushed yields down to 3.8%.

Coventry

Marked as a city on the upswing, Coventry leaps to the third rank, enticing landlords with a 6.5% rental yield. The city’s appeal is bolstered by its educational institutions and employment opportunities, making it a compelling choice for investors looking for growth and stability.

Hull and Glasgow

For those chasing the highest yields, Hull presents an unparalleled opportunity with an 8.8% yield, despite its lower average rent and property prices. Glasgow follows closely, offering substantial rental income prospects and a healthy annual house price growth, making it a standout option for investors.

Oxford’s Diminishing Appeal

Once near the top, Oxford has seen a decline, slipping 17 places to rank 28th, hindered by low yields resulting from steep property prices, despite a strong rental demand.

Challenges Ahead in Welsh Cities

At the bottom, Newport and Swansea face ongoing challenges, grappling with low rents and relatively high property prices, making them less attractive to investors seeking profitability.