Investors rushed to take out landlord insurance on buy-to-let properties during the opening quarter of the year, ahead of 3% stamp duty surcharge. This underlined the growth of buy-to-let popularity over the last few years, with attractiveness heightened at a period of low interest rates and changing stock markets.
In fact, buy-to-let investment has easily outperformed other asset classes in recent times. Total annual returns for landlords reached 12% in 2015-£21,988 in monetary terms.
With this said, just where are the best and worst locations for gross rental yields in the UK?
Buy-to-let hotspots
The latest TotallyMoney Buy-to-Let Yield Map gives an insight into the current rental market. The report looked at 137,955 rental properties and 303,822 properties marketed for sale online on the 1st October 2016.
Data shows that there is a clear geographical difference between the North and South of the UK in terms of yields. Northern regions lead the way, while Southern areas are lagging behind, due to the higher price of property in these locations.
In fact, nine of the ten top yielding postcode regions were found to be in Scotland and the North/Midlands regions.
On the other end of the scale, eight of the ten lowest yielding postcode regions were in Greater London, the South East or on the South Coast.

Where can you achieve the greatest rental yields?
The top ten postcode regions and average rents were revealed to be: (yield indicated in far right column)
Postcode | Postcode | Post Town | Coverage | AverageRent | Average House Price | |
1 | LS6 | Leeds | Beckett Park, Burley, Headingley, Hyde Park, Meanwood, Woodhouse | £1,044 | £116,115 | 10.79% |
2 | BD1 | Bradford | Bradford City Centre, Little Germany, Goitside, Longlands | £552 | £64,108 | 10.33% |
3 | YO1 | York | City Centre | £1,876 | £231,388 | 9.73% |
4 | PR1 | Preston | City Centre, Avenham, Broadgate, Deepdale | £952 | £125,810 | 9.08% |
5 | TS1 | Middlesbrough | Town Centre | £523 | £69,368 | 9.05% |
6 | L7 | Liverpool | City Centre, Edge Hill, Fairfield, Kensington | £720 | £99,114 | 8.72% |
7 | M3 | Manchester | City Centre, Deansgate, Castlefield | £1,230 | £177,546 | 8.31% |
8 | S1 | Sheffield | Sheffield City Centre | £823 | £118,861 | 8.31% |
9 | HD1 | Huddersfield | Huddersfield Town Centre, Hillhouse, Lockwood, Marsh | £656 | £101,536 | 7.75% |
10 | CF24 | Cardiff | Cardiff South, Rumney & Trowbridge | £1,220 | £192,548 | 7.60% |
The worst locations for rental yields were found to be: (yield indicated in far right column)
Postcode | Post Town | Coverage | Average Rent | Average House Price | Yield | |
867 | BR2 | Bromley | Hayes, Shortlands, Bickley, Bromley Common, Keston | £1,300 | £788,293 | 1.98% |
868 | N21 | London | Winchmore Hill, Bush Hill, Grange Park | £1,339 | £825,700 | 1.95% |
869 | HA6 | Northwood | Northwood, Northwood Hills, Moor Park | £1,732 | £1,103,645 | 1.88% |
870 | B15 | Birmingham | Edgbaston, Lee Bank | £1,013 | £656,412 | 1.85% |
871 | W8 | London | Kensington, Holland Park | £4,920 | £3,320,116 | 1.78% |
872 | RG8 | Reading | Goring, Streatley, Pangbourne, Whitchurch-on-Thames | £1,225 | £865,454 | 1.70% |
873 | N2 | London | East Finchley, Fortis Green, Hampstead Garden Suburb | £3,764 | £2,733,640 | 1.65% |
874 | BH14 | Poole | Lower Parkstone, Lilliput, Penn Hill | £1,288 | £1,000,795 | 1.54% |
875 | N6 | London | Highgate, Hampstead Heath | £2,779 | £2,418,305 | 1.38% |
[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/britains-highest-rental-yields-the-top-10-postcodes-for-buy-to-let