Student-heavy districts lead the BTL hotspots list for 2025
Latest lending data from a buy-to-let specialist suggests landlords in 2025 continued to prioritise postcode areas anchored by large student populations, with several locations delivering yields above 9% and the top return approaching 10%.
Based on purchase completions recorded between January 1 and December 31, 2025, Paragon Bank revealed that Cardiff’s CF24, Nottingham’s NG7 and Manchester’s M14 were the three most active postcodes for new investment. Loughborough’s LE11 and Gloucester’s GL1 completed the top five.
The lender also reported that terraced housing was the most commonly purchased property type across the hotspots, which it linked to demand from students, sharers and young professionals.
By yield, Plymouth’s PL4 delivered the strongest return at 9.78%, followed by Gloucester’s GL1 at 9.66% and Hull’s HU5 at 9.01%. Paragon said seven of the top 10 postcodes produced yields above 8%.
| Top 10 2025 buy-to-let hotspots in 2025 | ||
|---|---|---|
| Location | Postcode | Yield |
| Cardiff | CF24 | 9.06% |
| Nottingham | NG7 | 8.94% |
| Manchester (Fallowfield/Rusholme) | M14 | 8.28% |
| Loughborough | LE11 | 7.83% |
| Gloucester | GL1 | 9.66% |
| Croydon | CR0 | 5.93% |
| Birmingham (Selly Oak) | B29 | 7.72% |
| Hull | HU5 | 9.01% |
| Leeds (Headingley/Hyde Park) | LS6 | 8.96% |
| Plymouth | PL4 | 9.78% |
| Source: Paragon Bank | ||
“This year’s rankings show a clear and enduring trend; the strongest buy-to-let markets are those supported by large student populations and a solid flow of young renters, supplemented by other sources of tenant demand, such as hospitals or employment centres,” said Louisa Sedgwick, managing director of mortgages at Paragon Bank. “Landlords are increasingly targeting locations where tenant demand is predictable and yields remain consistently high.”
“From Cardiff and Nottingham to Manchester and Leeds, these hotspots highlight how investor strategy has become more focused and data driven.
“Rather than being deterred by the wider economic environment, landlords are choosing resilient, high performing rental markets that continue to deliver strong returns.”
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