Postcodes with the highest rental yields in the UK — 2025
Short version: in 2025 the highest gross rental yields are concentrated outside London — particularly across northern England, parts of Scotland and Wales — where low entry prices combine with steady rental demand. Hotspots that repeatedly appear in market-data are Liverpool (multiple L postcodes), Sunderland (SR), parts of Glasgow (G), Plymouth (PL4 cited by some lenders), and a clutch of postcodes in the North East, Yorkshire and the Midlands. Several independent data providers (PropertyData, Paragon analysis reported by MoneyWeek, Zoopla and market guides) show typical gross yields in top postcodes running roughly 7–9% (and in very specific localities sometimes above 10% for HMOs). (propertydata.co.uk)
Why yields are highest outside London in 2025
Two structural forces drove the pattern in 2025:
- Price / rent divergence — house prices in many northern towns remain comparatively low while rents have risen (post-pandemic rental demand, constrained buy-to-let supply). That increases gross yields.
- Tenant-demand concentration — university towns, regional employment centres and areas with constrained or specialist supply (e.g., social/housing demand, HMOs) keep occupancy and achievable rents high relative to local prices.
These trends show up in lender and market-analysis snapshots for 2025: Paragon and MoneyWeek highlight high yields in parts of Wales and the North; Rightmove/Zoopla rental reports show rents continuing to outpace mortgage cost increases, supporting yields outside London. (MoneyWeek)
How I’m (and the market) measuring “rental yield”
When analysts report “gross yield” they usually mean:
Gross yield (%) = (Annual rent / Purchase price) × 100
Example, worked digit-by-digit: suppose a flat in postcode L4 can be bought for £120,000 and lets for £800/month.
- Annual rent = £800 × 12 = £9,600.
- Divide: 9,600 ÷ 120,000 = 0.08.
- Multiply by 100 → 8.0% gross yield.
Note: gross yield is a quick comparator. Net yield must deduct voids, management, maintenance, insurance, mortgage interest and compliance costs (especially relevant after recent regulatory/tax changes). For decision-making always compute net yield and stress-test mortgage costs at likely rise scenarios.
Top postcodes / postcode areas to watch in 2025 (data synthesis)
Below I list postcodes/postcode areas that multiple market trackers flagged as high-yield in 2025, with short rationale and typical gross-yield ranges reported by the data providers.
1. L2 / L4 / L7 (Liverpool) — Yield band: ~7–9%
Liverpool remains the poster child for high gross yields in 2025: low purchase prices, strong student and young-professional demand, and major regeneration projects make L-postcodes consistently high-yielding. Many market guides name L4/L7/L1 among the best buy-to-let returns. (gettingstartedinproperty.co.uk)
2. SR1 / SR4 (Sunderland / South Tyneside) — Yield band: ~7–8.5%
Reports in 2025 show Sunderland among the fastest-rising yield cities—low entry prices plus rising rents have pushed SR postcodes into top-yield lists. (Property Portfolio Investor)
3. G11 / G32 (Glasgow areas) — Yield band: ~7–8%
PropertyData’s hotspot reports show several Glasgow postcodes with yields comparable to the best in England—an outcome of affordable stock and strong city rental demand. (propertydata.co.uk)
4. PL4 (Plymouth) — Yield band: up to ~10% in some localised reports
Lender and market write-ups (Paragon / MoneyWeek coverage) flagged PL4 as an area delivering double-digit gross yields in some micro-markets in 2025, driven by student population and constrained supply. (Note: these high readings are often for particular property types/streets rather than the entire postcode.) (MoneyWeek)
5. DL4 / TS4 (County Durham / Teesside) — Yield band: ~7–8%
PropertyData includes DL4 and TS4 in their 2025 yield hotspot table — cheap entry prices with reasonable rents lift gross returns. (propertydata.co.uk)
6. BD1 (Bradford) & LS3 (Leeds pockets) — Yield band: ~6.5–8%
Bradford and some Leeds postcodes are repeatedly noted for investor yields due to affordability and rental demand—particularly where properties are suitable for HMOs or multiple-let strategies. (Property Investments UK)
7. LE11 (Loughborough) / NG7 (Nottingham) — Yield band: ~6.5–8%
University towns and regional employment hubs often appear on mid-to-high yield lists—these two are examples flagged by market roundups for 2025. (MoneyWeek)
8. CH65 / M14 (Cheshire / Manchester pockets) — Yield band: ~7–8%
PropertyData’s hotspot map also highlights parts of the North West (Chester sub-areas and inner Manchester postcodes) with strong yields, especially where buy-in prices remain moderate. (propertydata.co.uk)
Hot tips for investors who chase yield in 2025
- Yield vs capital growth tradeoff — top yield postcodes often lag in capital appreciation. If you need exit equity fast, blends of yield + growth areas (e.g., regeneration corridors in Liverpool or Manchester commuter belts) are better.
- HMO vs single-let — HMOs can push gross yields substantially higher (PropertyData and Lendlord show very strong HMO returns in the North East), but regulation, management intensity and licensing risk must be factored in. (Lendlord)
- Check tenant demand drivers — student numbers, hospital/NHS employment, regeneration projects and nearby factories/centres matter more than the postcode name itself.
- Stress-test mortgages — after 2022–25 interest volatility, always model cashflow with 2–3% points higher rates than current offers.
- Local compliance & licensing — several high-yield towns have introduced selective licensing or HMO licensing which changes operating costs. Factor that into net yield.
- Voids and maintenance — high gross yield can evaporate quickly with long voids or poor stock condition—inspect, price for refurbishment, and budget conservatively.
Risks and what the 2025 market signals
- Policy risk: further regulation for tenant protections, landlord licensing expansion, or tax changes could reduce net returns.
- Concentration risk: investing only for yield within a single low-price town amplifies location risk (local employer closures, policy changes).
- Liquidity: lower-price, high-yield stock can be slower to sell in weak markets.
Market trackers through 2025 show rents have outpaced mortgage costs recently (supporting yields), but rent growth slowed in mid-2025 — that changes the edge investors have enjoyed and increases the importance of conservative underwriting. (MoneyWeek)
Data sources & reading list (key market references used)
- PropertyData — “Rental yield hotspots” (2025 hotspot table). (Used for postcode-level hotspot signals.) (propertydata.co.uk)
- MoneyWeek / Paragon reporting — Paragon-backed hotspot reporting highlighting CF24/PL4 and others (2025 summaries). (Used for lender/market insights and some high-yield calls.) (MoneyWeek)
- GettingStartedInProperty / AspenWoolf / regional guides — Liverpool and northern-city focus pieces explaining why L-postcodes persist as high-yield areas. (gettingstartedinproperty.co.uk)
- Zoopla rental market report (2025) — broader rental trends and rent vs mortgage comparisons, used to contextualise yield drivers. (Zoopla)
Quick checklist you can use before pulling the trigger on a deal
- Are advertised rents verified by local agents or recent let prices?
- Run gross and net yield. For net yield, subtract: 10–20% for voids/management + 1–2% insurance + mortgage interest at stress rate.
- Check licensing regime and selective licensing status at the local council.
- Confirm tenant pool (students, professionals, benefit tenants) and likely turnover.
- Obtain a local survey and get a refurbishment quote before exchange.
Want a tailored list for your budget and strategy?
I can produce a ranked list of postcodes matched to your criteria (budget, HMO vs single-let, target gross yield, or capital-growth focus) using the latest market snapshots and sample property metrics. Tell me your target purchase price range, whether you’ll use a mortgage, and the letting type — I’ll run the numbers and give a short due-diligence template for each suggested postcode.
PL4 (Plymouth) — Snapshot
- Typical asking price (2025 snapshot): ~£180k–£220k for mainstream terraced flats/houses.
- Typical achievable monthly rent (character stock): £700–£950.
- Representative gross yield range: ~8.5%–10.5% (some micro-locations and HMO conversions reported above 10%).
The thesis
PL4 emerged in 2025 as one of the UK’s top gross-yield postcodes because a relatively low entry price base met sustained rental demand from three sources: students (multiple HE providers in Plymouth), public sector workers (NHS, MOD-adjacent roles), and local hospitality/port economy staff. Paragon and other market trackers flagged PL4 for particularly high headline yields in their 2025 hotspot lists.
Worked example (digit-by-digit) — single-let 1-bed flat
- Purchase price: £210,000.
- Rent: £900/month → Annual rent = £900 × 12 = £10,800.
- Gross yield = 10,800 ÷ 210,000 = 0.051428… × 100 → 5.14% (note: this example shows the sensitivity to price; local micro-prices can be lower — a £160k buy at same rent would be 6.75%).
- HMO or multi-let scenarios in PL4 often produce the highest headline yields because splitting a 3–4 bed stock into sharers raises total annual rent materially.
Why yields are high here (drivers)
- Lower purchase price floor compared with national averages.
- Multiple tenant demand channels (students + NHS + seasonal workers).
- Constrained newer supply in inner-city pockets, keeping rents firm.
- Recent yield growth in the South West (Paragon reported YoY yield growth concentrated in this region during 2025).
Key risks & mitigations
- Concentration risk: parts of PL4 depend heavily on student cycles — mitigate with mixed-use tenant targeting (young professionals).
- Licensing & local policy: check selective licensing and HMO rules with Plymouth City Council; licensing costs reduce net yield.
- Refurb & compliance: factor cladding, EPC and gas safety remediations into capex.
Due-diligence checklist (practical)
- Verify recent let achieved rents with two local agents and three live adverts.
- Obtain recent EPC & gas safety history; get a local structural survey.
- Price-in refurbishment and licensing; stress-test cashflow with +2% mortgage rate scenario.
- Map tenant drivers (university term dates, hospital rosters, seasonal employer shifts).
Exit & growth view
PL4’s yield advantage is clear for cashflow investors. For long-term capital appreciation, pair yield spots in PL4 with nearby regeneration corridors or diversify with coastal South West towns that show stronger capital growth prospects.
L4 (Liverpool) — Snapshot
- Typical asking price (2025 snapshot): ~£120k–£140k for many terraced flats/outer-city stock.
- Typical rents: £700–£850 for well-presented 1–2 bed flats.
- Representative gross yield range: ~7.0%–8.5% (L4 consistently among Liverpool’s strongest yield districts).
The thesis
Liverpool’s L4 benefits from affordability, steady student and young-professional pools, rental demand from city-centre jobs, and ongoing regeneration and infrastructure projects. Data aggregators repeatedly rank L4 and neighbouring L postcodes among the top gross-yielding areas nationwide.
Worked example — 2-bed terrace used as single let
- Purchase price: £130,000.
- Rent: £750/month → Annual rent = £9,000.
- Gross yield = 9,000 ÷ 130,000 = 0.0692307… ×100 → 6.92%.
Why yields are high here (drivers)
- Low purchase prices relative to rents.
- Strong tenant base: students, new graduates, city entry-level professionals.
- Regeneration that supports demand but keeps prices lower than metropolitan peers.
- HMO potential in certain streets further boosts headline returns for experienced operators.
Key risks & mitigations
- Stock quality: cheaper properties may require larger refurbishment budgets — obtain quotes before exchange.
- Voids: tenant churn can temporarily erode yields — professional management or guarantor strategies help.
- Local licensing: confirm selective licensing boundaries with Liverpool City Council.
Due-diligence checklist
- Check recent sold comparables and let-agency achieved rents.
- Include a 15–20% buffer for refurb and voids in net-yield models.
- Consider HMO suitability and licensing; ensure compliance with fire and HMO regs.
Exit & growth view
L4 is attractive for cashflow-first investors. For capital growth, target pockets close to major regeneration or transport hubs that historically capture stronger price appreciation.
SR1 (Sunderland) — Snapshot
- Typical asking price (2025 snapshot): often sub-£120k for terraced houses / small flats in many streets.
- Typical rents: £550–£750 for 1–2 bed stock.
- Representative gross yield range: ~7.5%–9.5% (higher in streets suitable for HMOs).
The thesis
Sunderland’s SR postcodes deliver strong headline yields due to very low entry prices coupled with steady local demand (students, NHS, regional employers). In 2025 regional roundups and some estate-agent analysis put Sunderland among top-yielding cities.
Worked example — 3-bed terraced HMO (converted)
- Purchase price: £115,000.
- Rent: 3 rooms × £300/month each = £900/month → Annual rent = £10,800.
- Gross yield = 10,800 ÷ 115,000 = 0.093913… ×100 → 9.39%.
Why yields are high (drivers)
- Exceptional price affordability; 2. Strong sharer demand; 3. Less competition from owner-occupiers vs larger metros; 4. HMO-friendly returns where licensing permits.
Key risks & mitigations
- Market sensitivity to local employer closures: diversify by property type or area.
- HMO regulation & management intensity: ensure licensing, higher insurance and professional management in models.
Due-diligence checklist
- Verify HMO licensing boundaries and local authority enforcement stance.
- Secure three local agent rent checks and references for target property.
- Build a conservative void and management buffer.
Exit & growth view
SR1 is primarily a cashflow play. Investors should accept slower capital uplift but strong rental coverage if operating efficiently.
G11 (Glasgow) — Snapshot
- Typical asking price: variable; many flats in stronger areas but still below many English city centre prices.
- Typical rents: £650–£1,000 depending on size & proximity to universities.
- Representative gross yield range: ~6.5%–8.5% (student-heavy micro-markets reach the top).
The thesis
Glasgow benefits from a large student population, multiple universities and colleges, and steady long-let demand. G11 and adjacent postcodes have shown strong rent rises in recent years, supporting elevated yields for well-managed stock.
Worked example — 2-bed flat let to professionals/students
- Purchase price: £150,000.
- Rent: £800/month → Annual rent = £9,600.
- Gross yield = 9,600 ÷ 150,000 = 0.064 = 6.40%.
Why yields are high (drivers)
- High student population → stable term-time demand.
- Tourism & short-let demand in parts of Glasgow adds rent optionality.
- Affordable price base vs London/SE supports solid yields.
Key risks & mitigations
- Short-let regulation: check licensing and short-let rules in Glasgow.
- Seasonality: student lets have predictable voids in summer; budget accordingly.
Due-diligence checklist
- Confirm tenancy type (student, professional, short-let) and adjust provisions.
- Verify local agent achieved rental levels and occupancy patterns.
- Ensure compliance with Scottish Tenancy law differences (e.g., repair responsibilities, deposit schemes).
Exit & growth view
G11 suits mixed investor types — stable long-lets with upside from short-let strategies where regulation and management allow.
BD1 (Bradford) — Snapshot
- Typical asking price: many terraced houses and flats under £120k.
- Typical rents: £500–£700.
- Representative gross yield range: ~7%–11% in micro-areas (headline figures vary widely).
The thesis
Bradford’s affordability and a diverse tenant pool (students in nearby campuses, NHS staff, local industry) create pockets of very high headline yields. Some localised reports show peak gross yields well into double digits for tight micro-markets, though these are often outliers based on low sale prices.
Worked example — 2-bed terrace
- Purchase price: £95,000.
- Rent: £650/month → Annual rent = £7,800.
- Gross yield = 7,800 ÷ 95,000 = 0.082105… ×100 → 8.21%.
Why yields are high (drivers)
- Very low purchase price base; good rental coverage from multiple demand groups.
Key risks & mitigations
- Higher landlord management intensity: older stock may need ongoing capex.
- Local economic sensitivity: factor in employment mix risk.
Due-diligence checklist
- Survey for damp/structural issues common in older terraces.
- Validate demand with local letting agents; ask for turnover rates.
Exit & growth view
BD1 is a classic cashflow play; portfolio investors often use Bradford to boost yield while diversifying with higher-growth regions.
CF24 (Cardiff) — Snapshot
- Typical asking price: mid-range for Welsh city centres; pocketed affordability in some suburbs.
- Typical rents: £700–£1,000 for central flats and terraces.
- Representative gross yield range: ~7%–9% (some hotspot streets reported higher yields).
The thesis
CF24 benefits from large public-sector employment (NHS & civil service), universities and stable rental demand. Paragon and investor roundups included CF24 among top hotspots in 2025 thanks to strong rental fundamentals.
Worked example — 1-bed flat near hospital/university
- Purchase price: £155,000.
- Rent: £800/month → Annual rent = £9,600.
- Gross yield = 9,600 ÷ 155,000 = 0.061935… ×100 → 6.19%.
Why yields are high (drivers)
- NHS & student-driven demand, plus an active rental market for city-centre professionals and short-term contracts.
Key risks & mitigations
- Regulatory & supply shifts: track council licensing; ensure short-let compliance.
- Market competition: rising investor interest can compress future yields.
Due-diligence checklist
- Check proximity to major employers/universities; confirm achieved rents with agents.
- Model net yield with conservative void & management allowances.