Cardiff, Nottingham and Manchester were the top BTL purchasing hotspots last year, as landlords targeted postcodes centred on strong student demand, resilient rental markets and attractive yields.

Paragon Bank data shows areas surrounding major universities remain the most active for new investment, with yields in many locations exceeding 9%.

Based on completions between 1st January and 31st December, Cardiff’s CF24, Nottingham’s NG7 and Manchester’s M14 postcodes took the top three spots, each home to large, stable student populations and well‑established rental ecosystems. Loughborough’s LE11 and Gloucester’s GL1 made up the top five.

Data

Paragon’s data shows that terraced housing remains the most common purchase type across the hotspots, reflecting landlord appetite for flexible, good‑value properties that suit students, sharers and young professionals.

On a yield basis, Plymouth’s PL4 delivered the best returns at 9.7%, followed by GL1 at 9.6% and Hull’s HU5 at 9%. Seven of the top 10 all delivered yields in excess of 8%.

Rankings

Louisa Sedgwick, managing director of mortgages (pictured), says the 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,” she explains. “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.”

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