BTL Investment: Plymouth & Cardiff Landlord Hotspots

Buy-to-Let (BTL) investment has returned across the country, with lending volumes rising dramatically and some postcodes producing more than 10% net rental yields, new market data has shown.

Despite higher start-up costs, including rising stamp duty levels and higher house prices, landlords are continuing to make profitable investments in targeted areas. New research has uncovered the UK's top Buy-to-Let hotspots where high tenant demand and cheap property prices are combining to boost yields.

Cardiff, Plymouth & Loughborough Producing Best BTL Investment Yields

The CF24 postcode in Cardiff is now the UK's number one BTL spot. About 42% of homes here are privately rented and the landlords have generated an average yield of 8.9%. The location has a constant demand due to its proximity to nearby hospitals and top universities, such as Cardiff University and the University Hospital of Wales.

Plymouth's PL4 postcode is second, with the highest average rental yield at 10.2%. With average property prices of approximately £216,000, significantly lower than the England average, the area continues to attract landlords. Its strong rental market benefits from the three universities and an increasing number of student tenants.

Third is LE11 in Loughborough, where landlords expect rental yields of up to 8%. Like the other hotspots, the area is close to a major university and benefits from a high number of tenants connected to local employment centres, such as Loughborough Hospital. These three postcodes are just the beginning; here's a rundown of the UK's top ten Buy-to-Let hotspots by mortgage activity and rental yields:

These locations share a common trait: they are larger towns or cities with significant employment hubs and large numbers of students, creating stable rental demand.

Lending Boom Hints at Resurgent Landlord Confidence

The BTL sector experienced a major turnaround in Q1 of 2025. Over 58,000 new Buy-to-Let loans were issued with a total value of £10.5 billion, according to UK Finance. In comparison to Q1 2024, this indicates a 38.6% increase in the number of loans and a 46.8% rise in the value of loans.

Rental yields have also shown an increase in the past year, rising from 6.88% in early 2024 to 6.94% in early 2025, indicating increased profitability despite the recent economic strain. Despite this upward trend, most of this growth occurred prior to the April 2025 stamp duty hikes, which may have prompted a rush in property purchases.

Industry insiders note that, with the right market conditions, such as population growth and shifting household structures, landlords are poised to reinvest. The current demand in the rental market continues to outnumber the supply, especially in areas with high employment rates and educational hubs.

Key Takeaway: Affordable Housing Fuel Starter Investment

Terraced houses remain as the first choice for landlords, mainly due to their relatively low price and decent returns. Most Houses in Multiple Occupation (HMOs) are terraced houses and offer the advantage of having multiple tenancies within one property for the landlord.

This trend is especially appealing to new investors and those looking to expand their portfolios at a minimal cost. Combined with the higher availability for Buy-to-Let lending, these preferences are helping to shape the next phase of rental market growth across the UK.