Another day, and another regional hotspot identified for buy-to-let investors!

This week Luton takes the top spot in a buy-to-let list of 105 postcode areas across England and Wales, ranked according to capital value growth, transaction volumes, rental yield and rental price growth.

While Luton is again the location with the highest returns, the latest LendInvest report also finds that Birmingham gives slightly higher returns than Manchester, and that Cambridge and Bristol are now amongst the top 10 locations.

Ian Boden, sales director at LendInvest, said: “It’d be so easy to look at the underlying data that tells us transaction volumes are down and make dire predictions about the health and wealth of the rental market.

Instead, what our index proves once again is that looking at one metric in the housing market is never enough. One metric on its own can’t clearly define the performance of a city’s property market.

Each of the top performing buy to let locations this quarter is experiencing a slowdown in transactions - substantial falls in places, dips in others. But, the best places this quarter continue to outperform the competition well thanks to strong performances on other, equally important metrics like rental yield, capital gains and rental price growth.

Data from the buy to let index, UK Finance and our own experience as a mortgage lender strongly suggests that right now a ‘buy, hold and remortgage’ strategy is some investors’ preference while the market works through a possible slowdown.”

The top 10 buy to let postcodes are:

Luton

  • Yield 3.91 per cent
  • Capital Gains 7.29 per cent
  • Rental Price Growth 3.7 per cent
  • Transaction Volume Change -6.15 per cent

Colchester

  • Yield 3.63 per cent
  • Capital Gains 6.33 per cent
  • Rental Price Growth 4.77 per cent
  • Transaction Volume Change -6.73 per cent

Romford

  • Yield 4.09 per cent
  • Capital Gains 4.99 per cent
  • Rental Price Growth 5.28 per cent
  • Transaction Volume Change -7.84 per cent

Birmingham

  • Yield 4.55 per cent
  • Capital Gains 5.00 per cent
  • Rental Price Growth 3.66 per cent
  • Transaction Volume Change -6.46 per cent

Manchester

  • Yield 5.36 per cent
  • Capital Gains 4.38 per cent
  • Rental Price Growth 3.71 per cent
  • Transaction Volume Change -7.35 per cent

Cambridge

  • Yield 3.26 per cent
  • Capital Gains 4.57 per cent
  • Rental Price Growth 4.76 per cent
  • Transaction Volume Change -7.36 per cent

Northampton

  • Yield 3.99 per cent
  • Capital Gains 6.59 per cent
  • Rental Price Growth 2.17 per cent
  • Transaction Volume Change -7.36 per cent

Bristol

  • Yield 3.83 per cent
  • Capital Gains 5.51 per cent
  • Rental Price Growth 2.75 per cent
  • Transaction Volume Change -6.2 per cent

Ipswich

  • Yield 3.42 per cent
  • Capital Gains 5.77 per cent
  • Rental Price Growth 2.76 per cent
  • Transaction Volume Change -6.16 per cent

Southend-on-Sea

  • Yield 3.62 per cent
  • Capital Gains 6.05 per cent
  • Rental Price Growth 2.53 per cent
  • Transaction Volume Change -6.93 per cent

Richard Truman, Head of Operations at Simple Landlords Insurance said: “Different organisations use different data and cut it in different ways to come up with these lists of buy-to-let hotspots – but it’s all useful information for growing landlords! Obviously you always need to do your own research and due diligence in any investment area.”