Paragon Bank names top 10 BTL hotspots Mortgage Finance Gazette

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Cardiff’s CF24 postcode attracted the highest level of buy-to-let (BTL) investment during the 12 months to June 2025, Paragon Bank reveals, climbing from fifth place last year to top the lender’s latest BTL hotspot list.

With over four in 10 properties, 42%, in the CF24 area are privately rented and average yields of 8.9%, which is based on the number of BTL mortgages granted in the period.

Paragon suggests landlords are investing in the area to cater to the large numbers of NHS staff and strong student market

A new entrant into the list, PL4 in Plymouth is the area that saw the second highest levels of investment by BTL landlords during the period.

Similar to Cardiff Plymouth has three universities providing landlords with a reliable stream of term-time tenants, in addition to key workers employed at the Mount Gould Hospital located in PL4.

Rental yields are another aspect likely drawing landlords to PL4 with landlords able to generate annual average returns of 10.2%, the highest of all hotspots on the list.

Taking the third podium place is LE11 in Loughborough, last year’s eighth most popular postcode for landlord purchases, achieving average annual rental yields of 8.0% during the period.

Sharing similarities with many of the other hotspot locations, a key driver of demand is provided by students and large local workforces.

NG7 in Nottingham retained its place as the fourth most popular BTL investment postcode.

Other postcodes that also featured amongst Paragon’s top investment locations for a second-year running are Stoke-on-Trent’s ST4, Birmingham’s B29 and M14 in Manchester which fell from the top spot in 2024 to eighth this time around.

Postcode Weighted rental yield Most common type of property
CF24 – Cardiff 8.9% Terraced House
PL4 – Plymouth 10.2% Terraced House
LE11 – Loughborough 8.0% Terraced House
NG7 – Nottingham 8.5% Terraced House
GL1 – Gloucester 9.6% Terraced House
HU5 – Hull 9.3% Terraced House
LS6 – Leeds 8.2% Terraced House
M14 – Manchester 8.1% Terraced House
B29 – Birmingham 7.7% Terraced House
ST4 – Stoke-on-Trent 10.1% Terraced House

Paragon Bank managing director Louisa Sedgwick says: “Looking at our lending data covering the 12 months to the end of June, we can see similarities in landlord investment strategies.”

“Our data also shows that landlords typically purchase properties in larger town 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.”