Where are the best places in the UK to purchase a buy-to-let property? Mortgage lender Paragon Bank has dug deep into its files to find the top places its landlords have invested in the last year.
Its data showed Cardiff’s CF24 postcode had attracted the highest level of buy-to-let investment in the 12 months to the end June 2025.
The area climbed from fifth place last year to top the lender’s latest buy-to-let hotspot list this year. And it’s no wonder, since as many as 42% of properties in the area are privately rented and have average yields of 8.9%.
It would appear there are large numbers of NHS staff in the area and this, combined with a strong student market, makes it fertile ground for landlord investors.
Next on the list, in second place, is a new entrant – PL4 in Plymouth. Like Cardiff, Plymouth has three universities providing landlords with a reliable stream of term-time tenants. This is in addition to key workers employed at the Mount Gould Hospital located in PL4.
Plymouth landlords can generate annual average returns of 10.2%, the highest of all hotspots on the list. Meanwhile, Office for National Statistics (ONS) data revealed the area’s average property price of £216,000 is substantially lower than the England average of £286,000.
Taking third place is LE11 in Loughborough, which has risen from eighth most popular postcode for landlord purchases last year. Here landlords achieved average annual rental yields of 8.0% during the 12 months to June.
Again, a key driver of demand is provided by students and large local workforces, with LE11 home to the highly rated Loughborough University, the town’s largest employer, and Loughborough Hospital.
In fourth and fifth place are Nottingham’s NG7 area, where yields are 8.5%, and Gloucester, with 9.7% the average rental return.
The full list of the top 10 hotspots from Paragon Bank is below.
Louisa Sedgwick, managing director at Paragon Bank, said: “Looking at our lending data covering the 12 months to the end of June, we can see similarities in landlord investment strategies.
“Our data also shows that landlords typically purchase properties in larger town or cities and within relatively close proximity to universities or large local employers, benefitting from strong and stable demand.
“This support of higher education and healthcare, in addition to important sectors such as software, manufacturing and logistics, highlights the often-overlooked contribution of the PRS to the UK economy.”
She added: “Terraced houses were the property type most often bought by landlords in each of the hotspot locations. Smaller terraces are often more affordable than other property types, making them a good place to start for newer landlords or those looking to expand their portfolios.
“At the other end of the scale, Houses in Multiple Occupation (HMOs) are often classified as terraced properties but benefit from typically higher yields owing to the capacity for multiple tenancies.”
Top 10 buy-to-let investment locations (source: Paragon Bank)
| Postcode | Weighted rental yield | Most common type of property |
| CF24 – Cardiff | 8.9% | Terraced House |
| PL4 – Plymouth | 10.2% | Terraced House |
| LE11 – Loughborough | 8.0% | Terraced House |
| NG7 – Nottingham | 8.5% | Terraced House |
| GL1 – Gloucester | 9.6% | Terraced House |
| HU5 – Hull | 9.3% | Terraced House |
| LS6 – Leeds | 8.2% | Terraced House |
| M14 – Manchester | 8.1% | Terraced House |
| B29 – Birmingham | 7.7% | Terraced House |
| ST4 – Stoke-on-Trent | 10.1% | Terraced House |
