Cardiff’s CF24 postcode has emerged as the leading destination for buy to let investors in the first half of 2025, according to Paragon Bank.
Its data shows the city has risen from fifth place last year, with the area’s appeal stemming from a robust rental market – 42% of properties are privately rented.
Landlords there enjoy an average yield of 8.9% with demand fuelled by major healthcare facilities, including the University Hospital of Wales, St David’s Hospital and Cardiff Royal Infirmary.
Paragon also points to Cardiff’s big student population since 27% of residents are students.
Students and healthcare help yields
Paragon’s managing director, Louisa Sedgwick, said: “Looking at our lending data covering the 12 months to the end of June, we can see similarities in landlord investment strategies.
“Our data also shows that landlords typically purchase properties in larger town or cities and within relatively close proximity to universities or large local employers, benefitting from strong and stable demand.”
She added: “This support of higher education and healthcare, in addition to important sectors such as software, manufacturing and logistics, highlights the often-overlooked contribution of the PRS to the UK economy.”
Plymouth makes an appearance
Paragon says Plymouth’s PL4 postcode secured second place, marking its debut on the list.
With rental yields averaging 10.2%, the highest among the top 10, and property prices at £216,000, which is well below the England average of £286,000, PL4 is a magnet for investors.
The area benefits from a steady tenant base, including students from Arts University Plymouth, Plymouth Marjon University and the University of Plymouth, alongside key workers at Mount Gould Hospital.
Loughborough’s LE11 postcode claimed third spot, climbing from eighth last year, with rental yields of 8%.
Home to Loughborough University, a major employer, and Loughborough Hospital, the area mirrors the trend of investor interest in locations with strong academic and employment hubs.
Terrace homes are most popular
Other top 10 entries include Nottingham’s NG7, holding steady in fourth, and familiar names like Stoke-on-Trent’s ST4, Birmingham’s B29 and Manchester’s M14, which dropped from first to eighth.
Gloucester’s GL1 and Hull’s HU5 also featured, with yields of 9.6% and 9.3%, respectively.
Leeds’ LS6 rounded out the top 10, offering 8.2% yields.
Ms Sedgwick added: “Terraced houses were the property type most often bought by landlords in each of the hotspot locations.
“Smaller terraces are often more affordable than other property types, making them a good place to start for newer landlords or those looking to expand their portfolios.
“At the other end of the scale, HMOs are often classified as terraced properties but benefit from typically higher yields owing to the capacity for multiple tenancies.”
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