The Top UK Cities for Buy-To-Let Yields in 2025 with Best Postcodes Revealed

– Introduction
– Top UK Cities and Postcodes for Buy-to-Let Yields (2025)
– Regional Overview
– Considerations for Investors
– Conclusion

As of May 2025, the UK buy-to-let market is experiencing a notable shift, with investors increasingly focusing on high-yield areas outside London and the Southeast. Cities in the North and Midlands are emerging as prime locations for landlords seeking strong rental returns. 

In today’s article we will be exploring the top cities and post codes across the UK for rental yields as well as possible considerations for investors in the rental market.

1. Manchester

• Top Postcode: M14
• M14, encompassing areas like Fallowfield and Rusholme, is renowned for its high rental yields, driven by a substantial student population and affordable property prices. (Property Data, 2025)
•  House prices in M14 had an overall average of £253,058 over the last year. The majority of properties sold were terraced properties, selling for an average price of £234,318. Semi-detached properties sold for an average of £331,139, with flats fetching £171,342.

2. Newcastle

• Top Postcodes: NE1, NE4, NE6
• These central postcodes offer exceptional yields, attracting investors due to their affordability and strong rental demand. (Verta Property Group, 2023)

3. Leeds

• Top Postcode: LS3
• LS3 boasts one of the nation’s highest rental yields, approximately 12%, though it requires a higher initial investment. (Property Secrets, 2024)
• House prices in LS3 had an overall average of £186,889 over the last year. The majority of properties sold were terraced properties, selling for an average price of £187,500, whilst flats sold for an average of £185,667.

4. Sunderland

• Top Postcode: SR1
• SR1 offers yields above 8.5%, making it an attractive option for investors seeking high returns with lower entry costs.
• House prices in SR1 had an overall average of £60,718 over the last year. The majority of properties sold were flats, selling for an average price of £46,590. Terraced properties sold for an average of £90,325, with semi-detached properties fetching £95,000. Overall, the historical sold prices in SR1 over the last year were 25% down on the previous year and 66% down on the 2008 peak of £179,847.

5. Bradford

• Top Postcode: BD1
• BD1 provides yields exceeding 8.5%, coupled with some of the UK’s most affordable property prices.
• House prices in BD1 had an overall average of £105,342 over the last year. The majority of properties sold were flats, selling for an average price of £97,828. Terraced properties sold for an average of £193,000.

6. Liverpool

• Top Postcodes: L5, L4, L33
• Liverpool’s L5 area offers average yields around 6.7%, with other postcodes like L4 and L33 reaching up to 9%, supported by a strong student and young professional demographic. (Faizullah-Khan, 2024)

7. Burnley

• Burnley stands out with yields over 8%, attributed to low property prices and consistent rental demand. (The Times, 2024)

8. Redcar & Cleveland

• This area has seen up to 50% of property sales going to landlords, offering gross yields around 9.8%, making it a hotspot for buy-to-let investments. (Money Week, 2025)

9. Birmingham

• Birmingham continues to be a solid choice for investors, with areas offering competitive yields and benefiting from ongoing regeneration projects.

10. Nottingham

• Nottingham is recognised for its strong rental yields, particularly in areas with significant student populations.

North East:

Cities like Sunderland and Newcastle are leading with high yields, driven by affordable property prices and strong rental demand.

North West:

Manchester and Liverpool remain attractive due to their vibrant economies and large student populations.

Yorkshire:

Leeds and Bradford offer some of the highest yields in the country, appealing to investors seeking strong returns.

Midlands:

Birmingham and Nottingham are notable for their growth potential and consistent rental demand. (Pauzible, 2025) (Zoopla, 2024).

While high yields are appealing, it’s essential to consider:

Tenant Demand: Ensure there is consistent demand in the area to minimise void periods. Tenant demand refers to the level of interest and competition among renters for available rental properties in a specific area. It is a key indicator for property investors and landlords as it directly affects rental income stability, property vacancy rates, and potential rental yields.

Property Management: Investing in areas far from your residence may require reliable property management solutions. Property management solutions help landlords and property investors manage rental properties more efficiently. They typically include tools for tenant management, maintenance tracking, rent collection, and financial reporting.

Regulatory Changes: Stay informed about local and national regulations that may impact rental profitability. For example, the Renters’ Rights Bill is a proposed UK law aimed at strengthening tenant protections by abolishing “no-fault” evictions (Section 21), capping advance rent payments, and prohibiting discrimination against renters (e.g.  those on benefits or with children). The Bill concluded its Committee Stage in the House of Lords on 15 May 2025, with the Report Stage anticipated before the summer recess, potentially leading to Royal Assent by July 2025.

In conclusion, the UK buy-to-let market in 2025 presents significant opportunities for investors, particularly in cities outside of London and the Southeast. Cities like Manchester, Newcastle, and Leeds offer strong rental yields, driven by a combination of affordable property prices and high tenant demand, especially in student-heavy areas. Meanwhile, locations such as Burnley, Redcar, and Cleveland are emerging as new investment hotspots, boasting some of the highest rental returns in the country.

However, prospective investors must carefully consider several factors beyond yield percentages. Tenant demand remains a critical determinant of rental income stability, and effective property management solutions can help mitigate the challenges of maintaining distant or multiple properties. Additionally, the evolving regulatory landscape, highlighted by the pending Renters’ Rights Bill, underscores the importance of staying informed about policy changes that could impact rental strategies and profitability.

Ultimately, while high-yield postcodes offer attractive prospects, successful buy-to-let investment requires a balanced approach that includes comprehensive market research, strategic property selection, and ongoing compliance with evolving legislation.

Considering how you might fund the expansion of your property portfolio?

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