Buy-to-let powerhouse Aldermore has declared Bristol the unrivalled city for landlords to park their investments in 2024. In a riveting revelation, the lender identified the top five cities, with Manchester, Coventry, Brighton, and the ever-iconic London securing their positions in the coveted list.
Aldermore, renowned for its meticulous analyses, dissects five pivotal indicators shaping the desirability of buy-to-let ventures: average total rent, short-term returns via yield, decade-long house price growth, the minimal vacancy rate relative to the housing stock, and the percentage of city dwellers entrenched in the rental market.
Bristol, with its promising rental prospects, an abundance of long-term private renters, and a scarcity of vacant properties, soared to the zenith of the leader board this year. The city boasts an attractive annual return growth of 6.6%, yet caution flags for those eyeing quick gains, as short-term yields hover at 4.4%.
Manchester, relinquishing its throne from the previous year, still remains a formidable choice for landlords. Despite a lower average rent per room at £461 and a mere 0.9% vacancy rate (below the national average of 1.2%), Manchester flaunts a tantalizing long-term return of 6.1%.
Southern English cities like Brighton, London, and Reading also present rosy prospects for landlords, with higher average rents per room and robust demand from eager renters.
Breaking the historical mould, a Scottish city, Glasgow, has stormed into the top 10 for the first time, clinching the eighth spot. Glasgow offers landlords a lucrative £471 in rental returns and boasts one of the highest short-term returns at 8.6%, eclipsing the national average of 5.5%.
The ratings further expose the upward trajectory of average rent per room, escalating from £423 in 2021 to £455 this year. Astonishingly, Aldermore’s research reveals that a staggering nine out of 10 landlords increased their rents in the past year, highlighting the unyielding demand in the current rental market.
At the bottom of the pecking order, Newport and Swansea stoically maintain their positions in 49th and 50th place. Newport lags with a meagre rent return of £292 per room, although long-term yields glitter at a promising 4.9%.
Cardiff, however, mounts a modest ascent to the 40th spot, propelled by a commendable 25% private renter proportion (above the average of 22%) and a scarcity of vacant properties.
Jon Cooper, the Head of Mortgages at Aldermore, remarked on the tumultuous journey landlords have navigated, grappling with rising interest rates, inflation, and evolving property legislation. Despite the challenges, Cooper notes a resolute demand for rental accommodation, emphasizing the need for landlords to meticulously research and optimize their portfolios in the face of adversity.