Where are the Best Rental Yields in the UK?

Category: Rental Yields

Rental yields are one of the most important factors in any property investment strategy. While UK property offers reliable passive income, returns can vary widely by location.

In this article, we highlight the areas with the best rental yields in the UK, helping both new and experienced investors identify the best areas to maximise monthly income and long-term returns.

Author: Sophie Hope

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The Current

Average UK
Rental Yield

Landlords’ average returns are climbing, with the average UK rental yield now standing at 5.6%, a healthy increase from 5% at the end of 2024. This growth is being fuelled by a strong rental demand outpacing the more modest rise in house prices, creating a more attractive environment for buy-to-let investors.

The North is leading the way, housing areas with the best rental yields in the UK. Yorkshire takes the top spot, boasting an average yield of 7.9%, closely followed by the North West at 7.85%. The North East also continues to perform well, making the northern regions a magnet for savvy property investors looking for the UK’s best rental yields.

In contrast, Greater London is falling behind, with an average yield of just 4.5%. Despite sky-high rents averaging £2,121 per month, the city delivers the lowest rental returns in the UK, highlighting a clear North-South divide in property investment potential.

So, where should you be looking to buy a BTL property in 2025? Let’s look at the cities offering the best rental yields in the UK right now…

Cities Achieving The Best Rental Yields in the UK

Leeds

Leeds stands out as one of the UK’s most attractive cities for property investment, consistently delivering some of the best rental yields in the UK, averaging between 6% and 7%. For buy-to-let investors, this performance, combined with high tenant demand from professionals, students, and young families, makes Leeds a reliable market for generating income with long-term stability.

Beyond ranking highly for the UK’s best rental yields, Leeds has demonstrated impressive capital growth, consistently ranking among the top five UK cities for property appreciation in recent years. This growth is underpinned by robust economic performance, a rapidly growing population, and a dynamic business scene that includes finance, digital, and healthcare sectors.

Manchester

Widely regarded as the capital of the North, Manchester has become a magnet for property investors seeking strong rental returns and long-term capital growth. Thanks to its expanding population, thriving job market, and world-class universities, demand for rental property remains consistently high. The city ranks highly for the best rental yields in the UK, sitting at around 6.5%, comfortably above the national average, making Manchester a high-performing location in the UK’s buy-to-let market.

As of January 2025, the average property price in Manchester reached £246,000, representing a 5.3% increase compared to the previous year. This level of capital appreciation, combined with competitive entry prices, offers investors a strong balance of income and growth. With rising rents and relatively affordable purchase prices, Manchester presents an attractive option for those looking to maximise returns.

Liverpool

Liverpool continues to perform as a top choice for property investors, driven by its affordability, strong rental demand, and ambitious regeneration projects. The city’s transformation has attracted a growing population of skilled professionals, significantly boosting tenant demand in recent years. High connectivity across Liverpool and direct links to key UK cities make it especially appealing for renters seeking both lifestyle and convenience.

As a result of this, the city’s rental market is thriving, creating compelling returns. Liverpool offers rental yields of up to 7.5%, making it one of the best rental yields in the UK. Coupled with relatively low property prices and strong growth potential, the city presents an opportunity for high-yield, long-term investments in a market that is still on the rise.

Bradford

Bradford has emerged as a high-performing hotspot, consistently attracting investor attention thanks to its strong rental yields and low entry prices. In both 2022 and 2023, it was named the UK’s number one yield hotspot by PropertyData and Track Capital, a title backed by an average rental yield of around 7%.

For investors also looking for capital growth, the outlook is equally compelling. JLL forecasts that property prices in Bradford could rise by up to 21% over the next two years, highlighting the city’s growing potential. This projected growth, combined with the best rental yields in the UK, positions Bradford as a prime location for investors seeking both income and appreciation.