Paragon Bank has unveiled the UK’s leading buy‑to‑let purchasing hotspots for 2025, with lending data showing landlords continue to target postcodes centred on strong student demand, resilient rental markets and attractive yields.
The findings highlight a clear pattern, with areas surrounding major universities remaining the most active for new investment, with yields in many locations exceeding 9%.
Based on completions between 1 January and 31 December 2025, Cardiff’s CF24, Nottingham’s NG7 and Manchester’s M14 take the top three spots, each home to large, stable student populations and well‑established rental ecosystems. Loughborough’s LE11 and Gloucester’s GL1 make up the top five.
Paragon’s data shows that terraced housing remains the most common purchase type across the hotspots, reflecting landlord appetite for flexible, good‑value properties that suit students, sharers and young professionals.
On a yield basis, Plymouth’s PL4 delivered the best returns at 9.78%, followed by GL1 at 9.66% and Hull’s HU5 at 9.01%. Seven of the top 10 all delivered yields in excess of 8%.
Top 10 BTL hotspots for 2025
1. CF24 – Cardiff (9.06%)
Cardiff’s prime student district, fuelled by Cardiff University and Cardiff Metropolitan, coupled with young professionals. High‑density rental streets and consistent year‑round demand deliver the strongest yields in the top 10.
2. NG7 – Nottingham (8.94%)
Home to the University of Nottingham and Nottingham Trent, NG7 combines high occupancy, strong turnover and a mix of terraced stock tailored to student living. Over half of residents are full-time students.
3. M14 – Manchester (Fallowfield / Rusholme) (8.28%)
One of the UK’s largest student hubs, the M14 postcode also covers a large geographic area. Significant demand from University of Manchester students ensures consistently strong performance for HMOs and terraced rentals.
4. LE11 – Loughborough (7.83%)
A well‑established student market driven by Loughborough University, offering landlords low entry values and dependable multi‑let demand.
5. GL1 – Gloucester (9.66%)
Generating one of the highest yields nationally, a standout postcode attracting landlords seeking strong returns. A varied tenant mix, including students and young professionals, supports year‑round stability. The Gloucestershire Royal Hospital and Gloucester Quays is also located within the postcode.
6. CR0 – Croydon (5.93%)
Unlike the university‑driven hotspots, CR0 benefits from commuter demand, ongoing regeneration and proximity to London, making converted flats especially appealing to landlords. Lower yields are reflected in higher purchase prices in the postcode.
7. B29 – Birmingham (Selly Oak) (7.72%)
A core student area for the University of Birmingham. Predictable academic cycles help underpin B29’s sustained rental strength, supplemented by demand from the Queen Elizabeth hospital.
8. HU5 – Hull (9.01%)
Hull’s University district continues to offer some of the UK’s strongest returns, supported by low property prices and a reliable tenant base.
9. LS6 – Leeds (Headingley / Hyde Park) (8.96%)
One of the country’s most established student rental zones, consistently delivering high occupancy and competitive yields.
10. PL4 – Plymouth (9.78%)
A high‑performing coastal student market where affordable purchase prices combine with exceptionally strong rental returns. This postcode was the highest in the top 10, with tenant demand also supplemented by the Mount Gould Hospital. Although nearly a third of the popular are students, it also boasts a mix of central suburbs and waterfront properties.
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said: “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. 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.”
