Britain's Top Buy-To-Let Hotspots 2025

Cardiff is Britain's buy-to-let hotspot, according to the latest data from a bank specialising in landlord loans.

Based on the number of buy-to-let mortgages granted in the year to the end of June, the Welsh capital's CF24 postcode topped the list released by Paragon Bank.

The bank says 42 per cent of homes in the neighbourhood are private rentals catering for students and workers at the nearby University Hospital of Wales, St David's Hospital and Cardiff Royal Infirmary.

One in four CF24 residents is a student at Cardiff University, Cardiff Metropolitan University or the University of South Wales, which are all within easy reach.

Separate data from the rent referencing agency Homelet shows the average rent in Wales is £933 a month - a year-on-year rise of 4.4 per cent

Landlord investment strategy

Paragon managing director Louisa Sedgwick said: "Looking at our lending data, we can see similarities in landlord investment strategies.

"Our data also shows that landlords typically purchase properties in larger towns or cities close to universities or large employers, benefitting from strong and stable demand. This support of higher education and healthcare, in addition to important sectors such as software, manufacturing and logistics, highlights the often-overlooked contribution of the private rental sector to the UK economy."

"Terraced houses were the property type most often bought by landlords in each of the hotspot locations. Smaller terraces are often more affordable than other property types, making them a good place to start for newer landlords or those looking to expand their portfolios."

The hottest buy-to-let location in England is a newcomer to the list, the PL4 postcode in Plymouth, Devon.

Like Cardiff, Plymouth has three universities, while the city's main hospital is also in the PL4 postcode.

Cheap homes and high yields

Gross rental yields of 10.2 per cent for the PL4 neighbourhood are the highest on the hotspot list. Average property prices are low - £216,000 compared with a UK average of £286,000.

Homelet data reveals rents in the South-West of England have risen by 3.3 per cent in the year to the end of June 2025. Tenants are paying an average £943 a month rent.

Another university town - Loughborough - took third place in the table.

Climbing from eighth place last year, the town's LE11 postcode is home to students at Loughborough University and workers at the town's hospital. Loughborough rentals of £922 a month surged by 10.9 per cent over the year, with yields giving a return of 8.0 per cent.

Last year's number one - the M14 postcode in Manchester - dropped to eighth place in this year's rankings.

Britain's top 10 buy-to-let hotspots

Source: Paragon Bank