"Our data also shows that landlords typically purchase properties in larger towns or cities and within relatively close proximity to universities or large local employers, benefitting from strong and stable demand"
- Louisa Sedgwick - Paragon Bank
Cardiff’s CF24 postcode has emerged as the UK’s top buy-to-let hotspot in the first half of 2025, according to new lending data from Paragon Bank.
The area, which climbed from fifth place last year, attracted the highest number of buy-to-let mortgage completions in the 12 months to the end of June. With 42% of properties privately rented and average yields of 8.9%, CF24 offers strong returns for landlords.
Student and key worker demand appears to be the driving force. Over a quarter (27%) of CF24’s residents are students, with three universities nearby. The postcode is also home to major NHS sites including Cardiff Royal Infirmary and within reach of the University Hospital of Wales and St David’s Hospital.
Plymouth and Loughborough round out the top three
Plymouth’s PL4 postcode made its debut on the list in second place, boasting the highest rental yields of all top-performing postcodes at 10.2%. Three universities and a key healthcare employer — Mount Gould Hospital — support rental demand in the area.
The average property price in PL4 is just £216,000, well below the England average of £286,000, making it an attractive option for investors.
Loughborough’s LE11 moved up from eighth place last year to third, with average yields of 8.0%. Demand is driven by Loughborough University and the town’s large NHS and education workforce.
Universities and hospitals drive landlord strategies
Other returning top locations include Nottingham’s NG7 (4th), Stoke-on-Trent’s ST4, Birmingham’s B29 and Manchester’s M14, though the latter fell from first to eighth place this year.
Paragon’s data shows that landlords continue to focus on locations with reliable tenant demand, especially from students and public sector workers.
“Looking at our lending data covering the 12 months to the end of June, we can see similarities in landlord investment strategies," explained Louisa Sedgwick, Managing Director at Paragon Bank.
"Our data also shows that landlords typically purchase properties in larger towns or cities and within relatively close proximity to universities or large local employers, benefitting from strong and stable demand. This support of higher education and healthcare, in addition to important sectors such as software, manufacturing and logistics, highlights the often-overlooked contribution of the PRS to the UK economy.”
She added: “Terraced houses were the property type most often bought by landlords in each of the hotspot locations. Smaller terraces are often more affordable than other property types, making them a good place to start for newer landlords or those looking to expand their portfolios. At the other end of the scale, HMOs are often classified as terraced properties but benefit from typically higher yields owing to the capacity for multiple tenancies.”
