Manchester top for buy-to-let investment for second year running

 Northern powerhouse dominates landlord rankings again

Manchester has taken the top spot as the best city for buy-to-let investment for the second year running, according to Aldermore’s latest Buy to Let City Tracker.

It’s followed by Glasgow, Coventry and Wigan, with Nottingham in fifth place.

Cities are assessed on five key indicators that impact buy-to-let (BTL) desirability. These include average total rent, the best short-term returns through yield, long-term return through house price growth over the past decade, the lowest number of vacancies as a proportion of total housing stock, and the percentage of the city’s population in the rental market.

Aldermore says its latest tracker highlights ongoing investment potential within the private rental sector, with average rent per room continuing to rise, up 7.3% since the previous year (£518 in 2024 vs £556 in 2025) and short-term returns up 6.9% in 2024 to 7.4% in 2025.

Manchester leads the way

In Manchester, house prices are rising by 6.3% and with the highest share of private renters (32%) and one of the lowest vacancy rates (0.8%), the tracker suggests sustained rental demand and limited supply. However, with short term yields at 7.2%, the company says Manchester favours long term investors.

Glasgow also retains its place in the rankings. In second place, it offers one of the highest short-term returns of 9.9%, compared to an average of 7.4%.

Stoke (21st) and Doncaster (27th) both saw the biggest increase. Despite low rental returns, they boasted short-term yields of 8.9% and 9.1% respectively. However, they also have a high proportion of vacant properties.

Aberdeen falls to bottom place

Aberdeen has replaced Swansea at the bottom of the table despite offering a high rental yield of 9.7%, with house prices falling by an average of -3.9% annually since 2015 and vacancy rates among the highest nationally at 4.5%.

Jon Cooper, director of mortgages at Aldermore, said: “Unlike previous years, this year’s Buy to Let City Tracker has seen noticeably less reshuffling within the top ten, suggesting the market is beginning to stabilise. That relative consistency comes despite a more challenging backdrop for landlords, both economically and because of more restrictive regulation.

“There’s no doubt that the operating environment has become more complex. Increased regulation and evolving tenant expectations mean landlords need to be far more hands-on, regularly reviewing their portfolios, reassessing yields and ensuring their properties remain competitive.

“However, the fundamentals remain supportive. Demand for well-located rental homes continues to outstrip supply in many cities, rental income has held firm year-on-year, and competition for quality stock remains high. For landlords prepared to adapt and take a long-term view, there are still resilient and attractive returns to be found.”

Aldermore’s Buy to Let City Tracker Top 10 cities:

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