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Property is hot news in the United Kingdom with prices continuing to rise. This is not just good news for home owners who are sitting on assets which are increasing in value far more than the rate of inflation and giving them a better return on investment than savings accounts.

Rental companies and large-scale, buy-to-let landlords are also seeing a bright future. Many people are being priced out of the property market and are therefore renting their homes instead. Others may rent because they can afford a better property or area than if they bought.

Since fewer people are enjoying job stability, people are also travelling more in search of work. They may find that they have a contract for 12 months or two years and so prefer to rent rather than buy in the short term.

So where are the best places to invest in rental properties?

Strange as it seems, London is not the best place. Although London has the highest rents by far, property prices are also at a premium, thus reducing the return on investment unless you have owned a property for a long time.

However, for property investors who are also relying upon a growth in house prices to boost their investment, London postcodes are still the best areas in which to put your money.

An article in the Financial Times suggests that UK property prices are expected to keep on rising in 2016, despite moves by the Government to slap a 3% stamp duty surcharge on buy-to-let and second home buyers from April.

The returns increase the longer you own a property because it increases in value whilst the level of interest being paid on a repayment mortgage also usually decreases over time.

According to figures by LendInvest, the North West and Wales are where buy-to-let investors have seen the highest returns. The top five cities with the highest average yearly rental yields between 2010 and 2015 were Manchester, Liverpool, Cardiff, Coventry and Oldham.

Another North West town which could be ripe for investment for buy-to-let companies is Barrow-in-Furness in Cumbria. BAE Systems is getting ready to build the next generation of nuclear submarines and is investing £300m in redevelopment its submarine base in the town. This specialist work will create substantial employment opportunities, with many contractors expected to move into this North-West town – which has the added benefit of close proximity to the beauty of the Lake District.