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While headlines suggest that landlords are exiting the market, the data tells a different story: for those with the capital and conviction to stay in, UK buy-to-let is entering a golden period of scarcity-driven returns.
The fundamentals appear stark. Rental stock sits 23% below pre-pandemic levels, with new listings at their lowest point in 2025.
Yet tenant demand remains structurally elevated as first-time buyers struggle to get a foot on the ladder and new builds lag behind demand.
This supply-demand imbalance is driving rental growth that outpaces most asset classes: outside London, rents hit £1,385 per calendar month in Q3 2025, up 3.1% annually, while London commanded £2,736, up 1.6%.
For investors with access to prime opportunities, Manchester and London rank among the UK’s most attractive buy-to-let propositions.
Manchester: Yields That Actually Work
Manchester ticks many boxes for investors. Manchester has high yields backed by robust fundamentals and favourable demographics. Average gross rental yields are 6.3%, nearly a full percentage point above London’s 5.7%. Some postcodes in M14 (Fallowfield) push past 7-8%.
The city’s appeal is structural, not cyclical. A private rental sector serving 62% of residents creates deep, stable demand. Meanwhile, capital growth accelerates through regeneration schemes around Piccadilly Mayfield, MediaCityUK and Northern Quarter, driving both rental appreciation and asset value gains.
Entry costs remain attractive. Average property prices are around £231,402, with rents of £1,675/month, delivering yields of around 7%. Manchester’s combination of strong employment, major university populations, and connectivity positions it as a regional powerhouse. As part of the North West’s £1,241 average rent market (up 5.1% annually, yielding 7.4%), it outperforms most UK regions.
London: Capital Preservation Meets Income
London’s 4.3% gross yields tell only part of the story. What investors buy here is long-term capital appreciation underpinned by global demand and constrained supply.
With average rents at £2,736, London remains a wealth-preservation vehicle, with income generation as a secondary benefit.
The capital’s tenant pool is unmatched. London continues to benefit from international professionals, corporate relocations, and deep liquidity. This creates resilience that regional markets can’t compete with. For investors prioritising capital security and portfolio diversification, London remains essential despite compressed yields.
The Macro Backdrop: Why Now?
Three converging factors make this moment significant:
1. Mortgage markets have normalised. Gross lending reached £24.9bn in September, with purchase approvals (65,900) now exceeding remortgaging for the first time since 2022. Average rates on new mortgages fell to 4.19%, the lowest since January 2023. The market has absorbed higher rates, and now income growth is restoring affordability.
2. Landlord ‘exodus’ creates opportunity. One-third of landlords have considered exiting, citing stamp duty increases, potential National Insurance changes, and the Renters’ Rights Bill. Even if this does happen, their departure will create an opportunity for you; reduced competition means higher yields, driven by lower supply and resilient demand.
3. Rental affordability is stretched but stable. Renting now consumes 44% of average wages, up from 40% five years ago. Crucially though, wage growth outpaces rent increases suggesting a sustainable equilibrium. First-time buyer deposits have risen from £40,326 to £45,374, which is keeping many in the rental market for longer. Changes to the modern lifestyle and opportunities in the capital and regional cities encourages ‘generation rent’ to stay in the city centre for longer before settling in the suburbs.
Regional Cities: The Hidden Alpha
Beyond Manchester and London, investors should monitor Birmingham (£1,247 pcm, 6.8% yield), Leeds (£1,093 pcm, 7.2% yield), and Nottingham (£1,208 pcm, 6.7% yield). These cities combine affordability, employment hubs, and student populations to generate returns that outstrip London while offering more favourable entry points than Manchester.
The Bottom Line
Buy-to-let isn’t broken; it’s consolidating into the hands of professional investors who understand supply dynamics and can access capital efficiently. With rental stock 23% below pre-pandemic levels, new listings at annual lows, and yields in Manchester approaching 8%, the case for strategic deployment is clear.
The Renters’ Rights Bill will likely accelerate landlord exits over the next 12-18 months, tightening supply further and driving rents higher. For investors positioned now, that’s not a threat; it may prove to be a strong tailwind.
The question isn’t whether to invest in UK buy-to-let. It’s whether you have access to the right opportunities.
Start building your property portfolio with BuyAssociation
Access is everything with BuyAssociation. Experience the best opportunities in off-market developments, pre-construction price points, and high-specification new-builds in highly demanded hotspots which cannot be found on public listing sites.
Since 2005, BuyAssociation has cultivated relationships with the UK’s most reputable developers, giving investor clients first access to exclusive opportunities in Manchester, London, and major cities nationwide. Their team identifies upcoming projects in high-demand areas and structures funding for renovations and new-builds that deliver institutional-grade returns.
Whether you want to learn more about investing, to start building or to expand your existing UK property portfolio – BuyAssociation are here to help.