Manchester has reclaimed top spot as the best city for residential landlords, with Glasgow, Coventry, Wigan and Bristol making up the rest of the top five in a list of 50 UK urban areas, data from Aldermore shows.
The North West city led the specialist bank’s Buy to Let City 2024 Tracker, taking the crown from Bristol, which came out on top the year before.
The survey says that Manchester has, “the best long-term property price rises of all the cities — 6.5% annual growth — and offers the prospect of significant appreciation with landlords benefiting not only from rental income but also from the rising value of their investment over time.
“Manchester also has a healthy market of tenants, with 32% of locals being private renters compared to the national average of 23%.”
Cities were judged on five standards — average total rent, the best short-term returns through yield, long-term return through house price growth over the past decade, the lowest number of vacancies as a proportion of total housing stock, and the percentage of the city’s population in the rental market.
While Bristol fell back to fifth spot, London tumbled 27 places to 32 “as local landlords see poorer returns on their investment,” the report says.
Bottom of the list was Swansea, followed by Newport and Sunderland.
However, the study finds that the rental market “continues to provide a good investment for landlords”.
The average rent per room jumped by 18% to £518 from a year ago, while rental yields surged from 5.5% to 6.9% over the same period.
Also, a January poll by Aldermore of 500 landlords found that there is more optimism among these investors compared to the year before, with only 31% considering leaving the sector today, compared to 48% last year.
It added that 58% of landlords say the value of their properties has increased over the past twelve months.
Aldermore director of mortgages Jon Cooper says: “We’ve seen a lot of movement within the Index this year, which is reflective of significant shifts in the rental market.
“Landlords continuously need to be on the ball, as difficult as that can be, reviewing their portfolios and ensuring they’re getting the most out of their investments.
“There are still good returns to be made in many cities, with rental income staying steady from last year and demand remaining strong with an average of ten applicants competing for each property.
Cooper adds: “Landlords are seeing increased regulatory demands alongside shifting tenant expectations, posing a unique set of challenges.
“This requires them to adapt swiftly to maintain their portfolios, at the same time as continuing to offer a good standard of rental accommodation for a wide variety of tenants.”
