What a difference a year makes!
Following our first buy-to-let yield research project in 2022, we’ve dug even deeper this year to bring you the latest insights into the world of property investment. Our sample size of postcodes in 2023 is almost double that of 2022 – 2,468 vs. 1,350 – which puts us in a position to offer an even more detailed analysis of the current state of play across the UK.
Right now, many landlords are carefully gauging their position in the market and keeping their options open. Inflation, wage stagnation and rate rises are all having an impact on the sentiment around investment. Meanwhile, the soaring property prices we’ve seen over the past few years are starting to slow down.
So, for new and experienced investors alike, it’s never been more important to weigh up the facts before choosing the right area for your next investment. This year’s report should help you do just that.
UK Regions By Yield
| Region | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|
| Scotland | £206,649 | 23.51% | £922 | 5.70% |
| North East | £227,892 | 20.71% | £782 | 4.72% |
| Wales | £265,444 | 36.62% | £919 | 4.68% |
| North West | £239,021 | 28.48% | £821 | 4.38% |
| West Midlands | £299,281 | 28.03% | £923 | 4.11% |
| East Midlands | £250,552 | 27.45% | £790 | 4.10% |
| Greater London | £597,917 | 14.47% | £1,914 | 4.00% |
| South East | £456,964 | 21.65% | £1,351 | 3.80% |
| South West | £378,791 | 28.51% | £1,121 | 3.78% |
| East of England | £408,430 | 22.09% | £1,189 | 3.65% |
The breadth of our data this year has allowed us to pull together this snapshot of rental yields by UK region. Scotland (5.7%) is currently offering a far greater yield than any other region, almost 1% more than the North East (4.72%) in second place.
Wales and the North West still offer good opportunities, far more so than the East of England and South West which rank lowest in terms of yield. That said, average house prices in the South West (£378,791) are considerably more accessible than the South East (£456,964) which is a key factor for many investors.
Note: Unfortunately there is no data available for Northern Ireland.
Top 10 Towns & Cities By Yield
| Town/City | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|
| Glasgow | £166,041 | 27.17% | £968 | 6.91% |
| Middlesbrough | £151,256 | 15.17% | £601 | 6.75% |
| Dundee | £172,958 | 27.80% | £848 | 6.57% |
| Preston | £177,171 | 15.00% | £924 | 6.30% |
| Swansea | £233,783 | 34.57% | £1,274 | 6.10% |
| Aberdeen | £169,770 | -9.30% | £742 | 6.03% |
| Nottingham | £232,014 | 27.86% | £1,096 | 5.94% |
| Southampton | £263,503 | 17.50% | £1,263 | 5.85% |
| Newcastle | £201,288 | 13.33% | £935 | 5.81% |
| Salford | £221,114 | 42.33% | £1,069 | 5.76% |
A breakdown of rental yields by city offers similar reading, as you’d expect, with locations in Scotland, the North East and North West dominating the top positions.
At 6.91%, Glasgow is clearly an area that many investors will be considering over the coming years considering its large student population, famed nightlife and excellent transport links. Looking further south, Middlesbrough and Preston are also enticing prospects at the moment in terms of buy-to-let potential.
Top 10 Postcodes In The UK By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | BD1 | Bradford | £64,805 | 4% | £575 | 10.70% |
| 2 | LS2 | Leeds | £147,827 | 49% | £1,238 | 10.00% |
| 3 | M14 | Manchester | £222,830 | 40% | £1,765 | 9.50% |
| 4 | LS4 | Leeds | £213,669 | 31% | £1,658 | 9.30% |
| 5 | NG7 | Nottingham | £196,583 | 34% | £1,423 | 8.70% |
| 6 | CF37 | Rhondda Cynon Taf | £155,836 | 36% | £1,114 | 8.60% |
| 7 | B29 | Birmingham | £268,335 | 21% | £1,916 | 8.60% |
| 8 | SR1 | Sunderland | £75,888 | 56% | £536 | 8.50% |
| 9 | TS3 | Middlesbrough | £85,440 | 25% | £604 | 8.50% |
| 10 | SA1 | Swansea | £153,226 | 17% | £1,074 | 8.40% |
Comparing this year’s data with our findings from 2022, BD1 in Bradford has moved from third to first place for the most lucrative rental yield anywhere in the UK – at a whopping 10.7%.
Last year’s top spot, NG7 in Nottingham, has been knocked down to fifth place due to rental yield dropping from 11.3% in 2022 to 8.7% in 2023.
M14 in Manchester continues to perform strongly, offering a yield of 9.5% in 2023, which is only marginally less than the 10.1% offered in 2022.
For those looking at the North East, TS3 in Middlesbrough and SR1 in Sunderland are both areas to consider, offering an identical yield of 8.5%.
Worst 10 Postcodes In The UK By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | CM4 | Brentwood | £747,589 | 27% | £1,304 | 2.10% |
| 2 | B93 | Solihull | £612,283 | 26% | £1,121 | 2.20% |
| 3 | HP4 | Dacorum | £724,304 | 10% | £1,403 | 2.30% |
| 4 | GL6 | Stroud | £508,422 | 36% | £984 | 2.30% |
| 5 | TQ6 | South Hams | £457,968 | 41% | £892 | 2.30% |
| 6 | W1 | Westminster | £2,256,107 | -15% | £4,421 | 2.40% |
| 7 | CV9 | North Warwickshire | £368,372 | 16% | £732 | 2.40% |
| 8 | W8 | Kensington and Chelsea | £2,013,838 | -9% | £4,139 | 2.50% |
| 9 | CB11 | Uttlesford | £619,247 | 11% | £1,314 | 2.50% |
| 10 | L39 | West Lancashire | £356,893 | 18% | £734 | 2.50% |
CM4 in Brentwood, Chelmsford has jumped from fifth place last year to take the crown (or should we say the wooden spoon) as the UK’s worst postcode for rental yield in 2023; however, the yield remains almost exactly the same as last year: 2.2% vs. 2.1%.
B93 in Solihull also continues to perform poorly, moving from sixth place to second place this year whilst maintaining exactly the same yield: 2.2%.
Overall, it’s clear that rental yields have improved slightly across the board, with no postcode falling below 2% this year. There are also positive signs for last year’s worst-performing postcodes – GU10 in Guildford and HP9 in Hemel Hempstead – both of which no longer feature in the top 10 list in 2023.
London
Top 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | SE28 | Greenwich | £320,584 | 10% | £1,627 | 6.10% |
| 2 | RM19 | Thurrock | £232,934 | 14% | £1,153 | 5.90% |
| 3 | NW8 | Camden | £1,112,235 | -5% | £5,396 | 5.80% |
| 4 | IG11 | Barking and Dagenham | £347,762 | 7% | £1,637 | 5.60% |
| 5 | SE17 | Southwark | £525,337 | -1% | £2,439 | 5.60% |
| 6 | SE18 | Greenwich | £416,921 | 6% | £1,881 | 5.40% |
| 7 | E16 | Newham | £456,118 | -1% | £2,071 | 5.40% |
| 8 | E3 | Tower Hamlets | £440,591 | -3% | £1,962 | 5.30% |
| 9 | E15 | Newham | £425,491 | 22% | £1,832 | 5.20% |
| 10 | E6 | Newham | £427,778 | 20% | £1,840 | 5.20% |
Worst 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | W1 | Westminster | £2,256,107 | -15% | £4,421 | 2.40% |
| 2 | W8 | Kensington and Chelsea | £2,013,838 | -9% | £4,139 | 2.50% |
| 3 | N10 | Haringey | £797,653 | 11% | £1,754 | 2.60% |
| 4 | IG5 | Redbridge | £584,143 | 18% | £1,296 | 2.70% |
| 5 | WD4 | Dacorum | £617,215 | 6% | £1,429 | 2.80% |
| 6 | N6 | Camden | £865,755 | 9% | £2,028 | 2.80% |
| 7 | SW3 | Kensington and Chelsea | £1,602,417 | 10% | £3,695 | 2.80% |
| 8 | WD7 | Hertsmere | £875,278 | 28% | £2,077 | 2.80% |
| 9 | SW7 | Kensington and Chelsea | £2,089,942 | 7% | £4,970 | 2.90% |
| 10 | KT20 | Reigate and Banstead | £705,589 | 40% | £1,734 | 2.90% |
Despite the fact that London as a region will likely never offer the best possible rental yields for buy-to-let landlords, the charm of the city and sheer scale of demand are still enough to make it a hotspot for UK investment.
That said, individual postcodes are performing much better than last year. The top spot in 2023 – SE28 in Greenwich (6.1%) – offers almost 1% more in yield compared with last year’s winner – DA9 in Dartford. Thurrock, Camden and Barking all offer good opportunities too.
At the other end of the spectrum, W1 in Westminster (2.4%) currently offers the worst value for money on average in London from a buy-to-let perspective; however, it still boasts an improvement on last year’s results where it came in at 2.3%. Property prices in W1 have also rocketed by more than £200,000 over the past 12 months, a staggering rise in such a short time.
The North
Top 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | BD1 | Bradford | £64,805 | 4% | £575 | 10.70% |
| 2 | LS2 | Leeds | £147,827 | 49% | £1,238 | 10.00% |
| 3 | M14 | Manchester | £222,830 | 40% | £1,765 | 9.50% |
| 4 | LS4 | Leeds | £213,669 | 31% | £1,658 | 9.30% |
| 5 | SR1 | Sunderland | £75,888 | 56% | £536 | 8.50% |
| 6 | TS3 | Middlesbrough | £85,440 | 25% | £604 | 8.50% |
| 7 | NE6 | Newcastle | £153,962 | 21% | £1,034 | 8.10% |
| 8 | NE4 | Newcastle | £139,571 | 8% | £912 | 7.80% |
| 9 | LS6 | Leeds | £265,156 | 29% | £1,700 | 7.70% |
| 10 | TS1 | Middlesbrough | £81,633 | 31% | £520 | 7.60% |
Worst 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | L39 | West Lancashire | £356,893 | 18% | £734 | 2.50% |
| 2 | CH48 | Wirral | £419,380 | 40% | £889 | 2.50% |
| 3 | WA16 | Cheshire East | £562,609 | 24% | £1,241 | 2.60% |
| 4 | CW6 | Cheshire West and Chester | £569,385 | 42% | £1,230 | 2.60% |
| 5 | LS29 | Bradford | £450,336 | 24% | £1,017 | 2.70% |
| 6 | DL10 | North Yorkshire | £297,044 | 31% | £679 | 2.70% |
| 7 | HG4 | Ripon | £338,054 | 23% | £789 | 2.80% |
| 8 | YO15 | East Riding of Yorkshire | £209,530 | 24% | £482 | 2.80% |
| 9 | CH64 | Cheshire West and Chester | £342,772 | 46% | £796 | 2.80% |
| 10 | YO7 | North Yorkshire | £307,246 | 14% | £740 | 2.90% |
As we’ve discussed, BD1 in Bradford remains at the top of the tree for best-performing yields anywhere in the UK.
Both LS2 and LS4 in Leeds have risen sharply up the ranking since 2022, both offering nearly 2% more in yield now compared with last year. Like Glasgow, Leeds is another incredibly popular area for investment due to its huge student population and nightlife.
Positions 5-10 are dominated by postcodes in the North East, which is a similar story to 2022. NE6 and NE4 are two areas to look into if you’re considering investing in Newcastle.
Wales
Top 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | CF37 | Rhondda Cynon Taf | £155,836 | 36% | £1,114 | 8.60% |
| 2 | SA1 | Swansea | £153,226 | 17% | £1,074 | 8.40% |
| 3 | CF43 | Rhondda Cynon Taf | £101,086 | 65% | £635 | 7.50% |
| 4 | CF24 | Cardiff | £223,353 | 34% | £1,279 | 6.90% |
| 5 | CF40 | Rhondda Cynon Taf | £115,503 | 56% | £656 | 6.80% |
| 6 | CF10 | Cardiff | £195,061 | 6% | £1,056 | 6.50% |
| 7 | NP13 | Blaenau Gwent | £117,699 | 66% | £632 | 6.40% |
| 8 | SA2 | Swansea | £276,000 | 32% | £1,436 | 6.20% |
| 9 | LL57 | Gwynedd | £208,762 | 6% | £950 | 5.50% |
| 10 | NP11 | Caerphilly | £174,863 | 43% | £766 | 5.30% |
Worst 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | NP25 | Monmouthshire | £444,470 | 25% | £992 | 2.70% |
| 2 | CF71 | Vale of Glamorgan | £504,519 | 44% | £1,198 | 2.80% |
| 3 | SY3 | Shropshire | £332,720 | 23% | £808 | 2.90% |
| 4 | SY5 | Shropshire | £392,105 | 29% | £961 | 2.90% |
| 5 | SY11 | Shropshire | £240,551 | 30% | £607 | 3.00% |
| 6 | SY4 | Shropshire | £344,088 | 34% | £864 | 3.00% |
| 7 | SY2 | Shropshire | £307,831 | 26% | £827 | 3.20% |
| 8 | NP16 | Monmouthshire | £346,896 | 30% | £964 | 3.30% |
| 9 | CF64 | Vale of Glamorgan | £378,608 | 28% | £1,122 | 3.60% |
| 10 | SA31 | Carmarthenshire | £231,902 | 33% | £692 | 3.60% |
Wales has been attracting more and more investment in recent years – and looking at postcodes such as CF37 and CF43 in Rhondda Cynon Taf and SA1 in Swansea, it’s easy to see why. Both areas offer around an 8.5% rental yield and relatively low barriers to entry considering the average property price is roughly £150,000.
In terms of worst postcodes for buy-to-let yield, Shropshire dominates the top 10 with yields sitting between 2.8-3.2%. CF71 in the Vale of Glamorgan has also seen a huge 44% increase in property prices over the past five years, with the average house price now reaching over £500,000.
Scotland
Top 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | AB24 | Aberdeen | £104,463 | -20% | £715 | 8.20% |
| 2 | G32 | Glasgow | £107,483 | 17% | £728 | 8.10% |
| 3 | G5 | Glasgow | £149,384 | 34% | £982 | 7.90% |
| 4 | G67 | North Lanarkshire | £96,882 | 28% | £620 | 7.70% |
| 5 | G1 | Glasgow | £160,641 | 8% | £1,036 | 7.70% |
| 6 | G31 | Glasgow | £143,880 | 43% | £902 | 7.50% |
| 7 | G20 | Glasgow | £157,698 | 24% | £963 | 7.30% |
| 8 | G42 | Glasgow | £143,124 | 64% | £856 | 7.20% |
| 9 | G11 | Glasgow | £181,025 | 10% | £1,082 | 7.20% |
| 10 | AB11 | Aberdeen | £100,467 | -14% | £602 | 7.20% |
Worst 10 Postcodes By Yield
| Position | Postcode | Area | Avg Property Price | 5 Yr Price Change | Avg Monthly Rent | Avg Rental Yield |
|---|---|---|---|---|---|---|
| 1 | ML11 | South Lanarkshire | £190,486 | 25% | £528 | 3.30% |
| 2 | FK2 | Falkirk | £186,473 | 26% | £595 | 3.80% |
| 3 | EH54 | West Lothian | £239,592 | 42% | £776 | 3.90% |
| 4 | AB15 | Aberdeen | £315,945 | -6% | £1,050 | 4.00% |
| 5 | IV2 | Highland | £226,207 | 10% | £764 | 4.10% |
| 6 | AB21 | Aberdeen | £223,940 | 11% | £761 | 4.10% |
| 7 | KA7 | South Ayrshire | £252,695 | 17% | £859 | 4.10% |
| 8 | G66 | East Dunbartonshire | £209,216 | 5% | £733 | 4.20% |
| 9 | G77 | East Renfrewshire | £330,327 | 3% | £1,175 | 4.30% |
| 10 | EH14 | Edinburgh | £277,756 | 18% | £1,014 | 4.40% |
Glasgow postcodes account for 7 of the top 10 best yields in Scotland, so it’s easy to see why investors are beginning to flock north of the border in search of exceptional deals.
Compared with the rest of the UK, the worst yield column certainly isn’t as bad either. Landlords can still secure an average return of 4.4% in Edinburgh’s EH14 for instance.
Takeaways
It’s clear that Scotland and the North East are currently offering the best opportunities for investors on average. We certainly expect to see more investors making the trip up to Glasgow this year. The fact the city has such a distinct culture, large student population, thriving social scene and close proximity to Edinburgh are all reasons why it’s our top pick for UK buy-to-let landlords in 2023.
The North East still edges the North West for great yield potential, though there are still fantastic deals to be found in Manchester, Leeds and Nottingham. Wales is another promising location, particularly postcodes in the Swansea area.
We hope you’ve found this guide useful, particularly at a time of such uncertainty within the market. If you’d like to discuss your current plans for 2023 with a property investment advisor then we’d be happy to talk through your best options and answer any questions you have. Use the form below to submit your details and we’ll be in touch!
About the data
We collected and analysed property market data from 2,468 postcode areas across England, Scotland and Wales.
Data source:propertydata.co.uk
