Student-focused locations continue to dominate buy-to-let investment, with landlords targeting areas offering strong rental demand and yields, according to Paragon Bank.
The lender’s analysis of completions between 1 January and 31 December 2025 found that Cardiff’s CF24, Nottingham’s NG7 and Manchester’s M14 were the most active postcodes for buy-to-let purchases.
Loughborough’s LE11 and Gloucester’s GL1 completed the top five, with all locations benefiting from established student populations and consistent rental demand.
Paragon said the findings reflect a clear trend of landlords focusing on resilient rental markets supported by universities and wider employment centres.
Terraced housing remains the most common property type across these hotspots, reflecting demand for flexible and relatively affordable homes suited to students, sharers and young professionals.
On a yield basis, Plymouth’s PL4 delivered the highest return at 9.78%, followed by Gloucester’s GL1 at 9.66% and Hull’s HU5 at 9.01%.
Seven of the top 10 locations recorded yields above 8%, underlining the continued appeal of student-led markets for investors.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “This year’s rankings show a clear and enduring trend; the strongest buy-to-let markets are those supported by large student populations and a solid flow of young renters, supplemented by other sources of tenant demand, such as hospitals or employment centres.
“Landlords are increasingly targeting locations where tenant demand is predictable and yields remain consistently high.
“From Cardiff and Nottingham to Manchester and Leeds, these hotspots highlight how investor strategy has become more focused and data-driven.
“Rather than being deterred by the wider economic environment, landlords are choosing resilient, high-performing rental markets that continue to deliver strong returns.”
