Paragon Bank analysis of its lending data has revealed the top 10 locations for investment by portfolio buy-to-let landlords, those with four or more properties.
Manchester’s M14 postcode was the most popular location for buy-to-let landlords to invest in during 2023, according to Paragon’s own lending data. Covering Manchester’s Fallowfield, Rusholme, Old Moat, and Ladybarn districts, and located between the University of Manchester and Manchester Metropolitan University, landlords are attracted to the area by the high student population. Those investing in the area can achieve rental yields of up to 7.5%.
This was followed by B29, covering the Selly Oak, Bournville, Edgbaston, Kings Heath, Northfield and Stirchley districts of Birmingham. Again, this area is home to a sizable student population, especially in Selly Oak, the location of Birmingham University. Close by in neighbouring Edgbaston is the Queen Elizabeth Hospital, a notable local employer as one of the UK’s largest single-site hospitals.
Although properties in the sought-after Birmingham postcode are the most expensive on the list, the average purchase price of £573,116 is skewed by the presence of large, period properties in affluent Bourneville, the model village that was founded by the Quaker Cadbury family for employees at its Cadbury’s chocolate factory. Across the postcode yields of up to 6.9% can be generated.
The third most popular buy-to-let hotspot was DH1 in Durham where properties can deliver yields of up to 7.3%. Continuing the theme of thriving student markets, the University of Durham’s Palatine Centre is located in Framwellgate Moor, contributing to the postcode’s popularity amongst students.
Top 10 buy-to-let investment locations:
| Postcode | Avg Property Value £ | Weighted rental yield | Most common type of property |
| M14 – Manchester | 367,461 | 7.50% | Terraced House |
| B29 – Birmingham | 573,116 | 6.90% | Terraced House |
| DH1 – Durham | 401,891 | 7.30% | Terraced House |
| NG7 – Nottingham | 343,700 | 7.70% | Terraced House |
| CF24 – Cardiff | 406,620 | 7.60% | Terraced House |
| NE2 – Newcastle-upon-Tyne | 524,208 | 6.50% | Terraced House |
| ST4 – Stoke-on-Trent | 130,990 | 9.10% | Terraced House |
| LE11 – Leicester | 275,561 | 7.40% | Terraced House |
| CW2 – Crewe | 154,961 | 8.70% | Freehold Block |
| BN2 – Brighton & Hove | 489,662 | 6.30% | Terraced House |
Richard Rowntree, managing director at Paragon Bank, said: “Our data shows that portfolio landlords have a strategy of targeting major towns and cities across England and Wales, from Brighton and Hove on the south coast, up through the midlands and Wales and onto Newcastle.
“Something that links many of these diverse areas is their proximity to universities or large employers, such as the NHS or manufacturing and distribution hubs. This helps to illustrate the crucial role that the PRS plays in supporting further education provision and the workforce, both vital facets of the UK economy.”
The analysis also found that terraced houses were the most popular investment property type in all of the top locations, except for CW2 in Crewe where multi-unit freehold blocks of flats were preferred by landlords.
