Student areas dominate buy to let hotspots – Paragon

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Student areas dominate buy to let hotspots – Paragon

Postcodes with large student populations dominate 2025’s buy to let investment activity as landlords look for areas offering strong yields and consistent tenant demand.

According to lending data from Paragon Bank, Cardiff’s CF24, Nottingham’s NG7 and Manchester’s M14 top the table.

The data is based on completions between 1 January and 31 December and each of those postcodes have a large university population and a well-established lettings market.

Elsewhere, Loughborough’s LE11 and Gloucester’s GL1 also feature prominently with demand from students and younger tenants supporting a strong lettings market.

landlords targeting strong returns

The bank’s managing director of mortgages, Louisa Sedgwick, said: “This year’s rankings show a clear and enduring trend; the strongest buy to let markets are those supported by large student populations and a solid flow of young renters, supplemented by other sources of tenant demand, such as hospitals or employment centres.

“Landlords are increasingly targeting locations where tenant demand is predictable and yields remain consistently high.”

She added: “From Cardiff and Nottingham to Manchester and Leeds, these hotspots highlight how investor strategy has become more focused and data‑driven.

“Rather than being deterred by the wider economic environment, landlords are choosing resilient, high‑performing rental markets that continue to deliver strong returns.”

Landlords opt for terraced homes

Across the BTL hotspots, Paragon says terraced housing remains the most common purchase type.

That’s because they suit shared living arrangements and sit at lower price points, which continues to attract landlords.

For yields, Plymouth’s PL4 delivered 9.78%, the highest of the top 10.

Gloucester’s GL1 followed at 9.66%, with Hull’s HU5 at 9.01%.

Seven of the 10 locations recorded returns above 8%.

Only Croydon’s CR0 appears in the hotspot list without a university driver, producing yields of 5.93%, reflecting commuter demand and regeneration activity, with converted flats forming a notable share of purchases.

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