Manchester has been revealed as the top location for buy-to-let investment, according to Aldermore’s Buy-to-Let City Tracker.
Cambridge was noted as the second best location for BTL investment and London as the third.
The tracker analysed 50 cities from across the UK and assessed the best location based on 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 percentage of the city population in the rental market.
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According to the lender, significant investment in commercial and residential developments over the past five years in Manchester contributed to it being the top BTL investment location.
The cities main selling points for private landlords include rental returns and long-term house price growth, but more importantly it has one of the biggest rental markets in the UK, with 31% of Manchester’s population being private renters.
In addition, it has low vacancy rates, above average rental prices and property prices increased by 4.1% annually.
Jon Cooper, head of mortgage distribution at Aldermore, said: “There has been a high level of uncertainty for landlords since the COVID-19 outbreak and they have had to continuously adapt to a raft of challenges but, with so many working from home right now, it reinforces the importance of a robust and diverse private rented sector.
“The changing needs of renters, whether to move to a new location or a different type of property to fit flexible working demands, has created investment opportunities for landlords.
“The private rented sector is vital to the economy right now and its recovery from the pandemic so landlords should seek portfolio advice from their lenders to see how they can look at new ways to support the sector.”