LendInvest, the UK’s leading marketplace platform for mortgages, has released the latest LendInvest Buy-to-Let Index report.
Published quarterly, the LendInvest BTL Index ranks 105 postcode areas around England and Wales based on a combination of four critical metrics: capital value growth, transaction volumes, rental yield and rental price growth.
Key findings for July 2018
- Luton (#1) reclaims top spot for the third time since December 2016
- Birmingham (#4) holds firm ahead of Manchester (#5) as the Midlands town presents key investment opportunity
- Regional capitals Cambridge and Bristol break into the Top 10 (#6 and #8)
- Inner London postcodes bounce back one year on; South East London jumps from #79 (June 2017) to #33
LendInvest has also published a special feature that investigates the reasons why transaction volume growth has slowed by as much as -6.77% on average across the UK. The special feature reflects specifically on recent findings by UK Finance that buy-to-let remortgages have increased in volume by 32.4%.
Ian Boden, Sales Director at LendInvest, said: “It’d be so easy to look at the underlying data that tells us transaction volumes are down and make dire predictions about the health and wealth of the rental market. Instead, what our Index proves once again is that looking at one metric in the housing market is never enough. One metric on its own can’t clearly define the performance of a city’s property market.
“Each of the very top performing BTL locations this quarter is experiencing a slowdown in transactions – substantial falls in places, dips in others. But, the best places this quarter continue to outperform the competition well thanks to strong performances on other, equally important metrics like rental yield, capital gains and rental price growth.
“Data from the BTL Index, UK Finance and our own experience as a mortgage lender strongly suggests that right now a ‘buy, hold and remortgage’ strategy is some investors’ preference while the market works through a possible slowdown.”
The Top 10 buy-to-let postcodes
| Yield | Capital gains | Rental price growth | Transaction volume growth | |
| Luton | 3.91% | 7.29% | 3.70% | -6.15% |
| Colchester | 3.63% | 6.33% | 4.77% | -6.73% |
| Romford | 4.09% | 4.99% | 5.28% | -7.84% |
| Birmingham | 4.55% | 5.00% | 3.66% | -6.46% |
| Manchester | 5.36% | 4.38% | 3.71% | -7.35% |
| Cambridge | 3.26% | 4.57% | 4.76% | -6.63% |
| Northampton | 3.99% | 6.59% | 2.17% | -7.36% |
| Bristol | 3.83% | 5.51% | 2.75% | -6.20% |
| Ipswich | 3.42% | 5.77% | 2.76% | -6.16% |
| Southend-on-Sea | 3.62% | 6.05% | 2.53% | -6.93% |
The Bottom 10 buy-to-let postcodes
| Yield | Capital gains | Rental price growth | Transaction volume growth | |
| East Central London | 2.86% | -13.86% | -0.20% | -7.27% |
| Durham | 4.41% | -3.03% | -2.81% | -8.21% |
| Cleveland | 4.23% | -2.29% | -0.70% | -6.58% |
| Crewe | 3.61% | -2.30% | 0.30% | -7.45% |
| South West London | 2.89% | -0.07% | -0.96% | -7.94% |
| Sunderland | 5.29% | -3.18% | -0.77% | -6.15% |
| West Central London | 2.61% | -1.69% | 0.87% | -6.91% |
| Twickenham | 3.38% | 2.51% | -2.32% | -7.33% |
| Blackburn | 4.69% | -1.92% | 0.55% | -6.54% |
| Lancaster | 3.79% | 0.90% | -1.52% | -6.00% |
Transaction Volume Growth slowdown
| LendInvest BTL Index Top 10 | March 2018 | July 2018 |
| Luton | 2.79% | -6.15% |
| Colchester | 1.53% | -6.73% |
| Romford | 2.63% | -7.84% |
| Birmingham | 1.65% | -6.46% |
| Manchester | 3.30% | -7.35% |
| Cambridge | 2.33% | -6.63% |
| Northampton | 3.51% | -7.36% |
| Bristol | 2.81% | -6.20% |
| Ipswich | 1.77% | -6.16% |
| Southend-on-Sea | 1.88% | -6.93% |