Landlords looking to expand their buy-to-let portfolios should look north in Manchester. Online comparison website GoCompare has set up a list of the best UK cities for owning and running buy-to-let investments. It has Manchester in the top spot, pushing London firmly into second place. The portal used a number of factors to compile its figures, including average property prices, average yields, share of population under 35, how many properties are available, new housing developments, how many properties available to let, rental price growth and the number of letting agencies or managers. From this, it ranked 31 cities.

With an average property price of £173,381 and average yields of 5.5%, Manchester is the top place to invest, according to the research. The city also has a healthy rental price growth of 5.76% and more than 322,000 people under the age of 35 living in the city. Of course, many of these will be tenants living in private rentals. The city also enjoys a healthy number of new housing developments – 689 in all. It may come as a surprise to many that London secured second place. Its high property prices at an average of £484,173 are off-putting for many investors, who can buy more properties or bigger ones if they look outside the capital. London does, however, have average yields of 3.05% and a large pool of would-be tenants, with around 4.5 million people under 35. However, rental growth is not so hot, standing at -1.12%.

Not surprisingly, it is cities with decent universities which are doing well in the GoCompare chart. Northern cities tended to fare better than their southern counterparts. The other cities in the top 10 are Nottingham, Liverpool, Leicester, Cardiff, Birmingham, Sunderland, Newcastle upon Tyne and Glasgow. Bottom of the pile is Belfast. Although yields are good at 4.26%, there is a shortage of properties to buy and even fewer properties currently available for rent. Other areas which are not faring so well include Oxford, Southampton and Brighton.

Oxford’s high property prices, at an average £411,108, works against it. However, it does have a rental price growth of 2.27%, which is higher than London. From the cities GoCompare looked at, the cheapest place to buy a property is in Stoke-on-Trent, where the average price is £196,000. Although this study factored in the number of under-35s living in a city, it has to be remembered that many older people are also living in and looking for rental accommodation.

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