Where is the most profitable area in the UK for buy-to-let landlords?

Property investors looking to invest in the buy-to-let market may wish to consider buying property in Luton, which currently offers the best return on investment, new research shows.

According to Lendinvest’s latest buy-to-let index, Luton in Bedfordshire is currently the most profitable area in the UK for buy-to-let landlords, thanks to a combination of rising rental prices and strong capital gains.

Other areas to perform well, based on a combination of capital value growth, transaction volumes, rental yield and rental price growth, include Stevenage, Rochester, Colchester, Dartford, Peterborough, Southend-on-Sea, Manchester, Canterbury and Romford.

The research also looked at top postcodes that voted Conservative and Labour in last week’s general election, and found that there is a clear correlation in high capital gains towns voting for the Tory party.

Christian Faes, co-founder and CEO of LendInvest, said: “Against a backdrop of all the political upheaval the country has endured in the last quarter, it isn’t surprising to see some significant changes in the performance of postcodes against one another.

“We’ve seen last quarter’s top performing postcode, Romford, fall nine places; while Manchester – unofficial home of the Northern Powerhouse – ascended to the top 10 for the first time.

“These shifts, however, are more isolated than systemic and the fact that there has not been a greater shakeup in the top 10 buy-to-let postcodes signals the durability and resilience of the UK property market.”

The Top 10 buy-to-let postcodes

Yield

Capital gains

Rental price growth

Transaction volume growth

Luton

4.54%

12.83%

7.37%

-10.40%

Stevenage

4.05%

11.64%

7.47%

-9.40%

Rochester

4.55%

12.34%

5.45%

-9.40%

Colchester

4.29%

14.14%

4.14%

-11.16%

Dartford

4.37%

13.61%

3.92%

-10.94%

Peterborough

4.71%

9.04%

6.98%

-10.67%

Southend-on-Sea

4.30%

12.37%

3.89%

-10.26%

Manchester

6.11%

7.58%

7.53%

-12.41%

Canterbury

4.36%

9.34%

6.62%

-11.49%

Romford

4.81%

14.42%

1.28%

-11.67%

The Bottom 10 buy-to-let postcodes

Yield

Capital gains

Rental price growth

Transaction volume growth

Sunderland

5.79%

0.75%

-0.5%

-8.65%

Lancaster

4.28%

2.10%

-0.3%

-10.27%

Darlington

4.19%

0.47%

-0.2%

-8.29%

Preston

4.35%

0.26%

-0.4%

-9.75%

Llandudno

4.56%

0.88%

-0.9%

-9.07%

Plymouth

4.12%

3.14%

-2.6%

-10.21%

Western Central London

3.75%

3.18%

-3.4%

-20.36%

North West London

3.70%

3.84%

-3.9%

-16.01%

West London

2.94%

1.74%

-3.0%

-18.95%

Galashiels

3.98%

1.60%

-6.2%

-12.54%

The Top 10 postcodes that voted Conservative

Yield

Capital gains

Rental price growth

Transaction volume growth

Stevenage

4.05%

11.64%

7.5%

-9.40%

Rochester

4.55%

12.34%

5.4%

-9.40%

Colchester

4.29%

14.14%

4.1%

-11.16%

Dartford

4.37%

13.61%

3.9%

-10.94%

Southend-on-Sea

4.30%

12.37%

3.9%

-10.26%

Romford

4.81%

14.42%

1.3%

-11.67%

Chelmsford

3.96%

12.44%

3.3%

-10.25%

Northampton

4.68%

9.64%

4.8%

-11.23%

Swindon

4.10%

9.46%

5.0%

-10.49%

St Albans

3.56%

11.30%

3.9%

-12.48%

The Top 10 postcodes that voted Labour

Yield

Capital gains

Rental price growth

Transaction volume growth

Luton

4.54%

12.83%

7.4%

-10.40%

Peterborough

4.71%

9.04%

7.0%

-10.67%

Manchester

6.11%

7.58%

7.5%

-12.41%

Canterbury

4.36%

9.34%

6.6%

-11.49%

Bristol

4.45%

10.34%

4.8%

-10.82%

Coventry

4.95%

8.49%

5.6%

-10.49%

Ipswich

4.02%

11.77%

3.2%

-10.86%

Newport

4.79%

5.52%

6.8%

-8.83%

Ilford

4.37%

13.94%

0.9%

-14.63%

Leeds

4.77%

5.97%

6.4%

-9.59%

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