A report on the buy-to-let market published by specialist lender, UCB Home Loans, points towards continued growth in the sector and highlights a number of UK hotspots where investors currently see the greatest potential from property investment.

“Investment in buy-to-let property has been particularly strong over the past six months. In the first half of this year, lenders advanced £17.5 billion on 152,500 buy-to-let mortgages, surpassing all records since the market took off ten years ago,” said Keith Astill, managing director at UCB Home Loans.

“Cities such as London are now back on the agenda for many property investors, as house prices have not risen as quickly here as they have in many other parts of the country over the past few years,” he said.

“The increase in people coming to work in the UK from other EU countries, coupled with the growth of universities, has also helped to expand the number of tenants looking for properties, giving landlords new opportunities for profitable property investment.”

Average house prices rose by 0.7% in October, bringing the annual rate of growth to 8%. To some extent, experience indicates that rising prices help to support growth in the buy-to-let sector.

“Investors should plan property purchases carefully and we would always recommend seeking independent financial advice before making a commitment” said Keith Astill.

“Average rental returns are just over 5% across the UK at the moment, but landlords can achieve significantly more – or less – than this, depending on how well they have judged the purchase price against the rental potential of the property,” he said.

Of the 65 towns and cities in the report, the following 20 are listed as those where the most profitable investments can often be found at present:

Aberdeen
Belfast
Bournemouth
Brighton/Hove
Dundee
Exeter
Glasgow
London
Middlesbrough
Newport
Nottingham
Peterborough
Preston
Sheffield
Southampton
Stoke
Sunderland
Swindon
Walsall
Watford