Paragon Bank has revealed the top 10 locations that attracted the most buy-to-let (BTL) investment in 2024, with CF24 in Cardiff being the most favoured postcode.
Research found that CF24 was popular largely due to its appeal to students from the city’s three universities.
Landlords in the area achieved average rental yields of 8.7%.
B29 in Birmingham, which includes Selly Oak and is home to the University of Birmingham and the Queen Elizabeth Hospital, came in second with rental yields of 7.5%.
PL4 in Plymouth secured third place, benefiting from good transport links and amenities that attract both students and key workers, allowing landlords to achieve rental yields of 9.6%.
Other notable locations included LS6 in Leeds, NG7 and NG3 in Nottingham, M14 in Manchester, and GL1 in Gloucester, along with postcodes in Liverpool and Stoke.
Research found that terraced houses were the preferred property type in all areas except for NG3, where converted flats were more commonly purchased by buy-to-let landlords.
Neil Smith, head of surveyors at Paragon Bank, said: “Looking at last year’s most popular postcodes amongst Paragon’s buy-to-let landlords highlights geographical concentrations of investment.
“Even though privately rented homes are in short supply all over the UK, landlords are strategic and often target locations with consistently high demand; cities where we see large transient populations, such as students and temporary workers, alongside more permanent residents like young professionals and families.
Smith added: “There is also a notable propensity amongst buy-to-let landlords to invest in property types that can deliver strong yields, often terraced houses and HMOs.”
“While serving distinct markets has advantages, it is wise to consider if a particular location could also appeal to other tenant cohorts to help investments remain profitable if there is a downturn in the primary market.
“The main takeaway here is to thoroughly research potential locations before jumping in with both feet.”
