Property investors targeting strong rental returns may want to look north, as new data reveals Manchester currently offers the best average yields in England and Wales. But it’s London that’s catching up fastest, with rental yields in the capital improving more than almost anywhere else.
Manchester and wales lead the yield league
According to a new analysis from landlord software provider Cohab, Manchester landlords are enjoying average annual yields of 6.35%, the highest in the country. The city’s thriving rental market is buoyed by its large student population, young professional workforce, and robust jobs market.
Merthyr Tydfil in Wales follows closely behind at 6.28%, with Portsmouth in third place offering yields of 6.21%. Also performing strongly are Newcastle (6.02%) and Salford (5.91%), reinforcing the North’s continued appeal to investors.
Saveli Kotz, founder and CEO of Cohab, highlighted the ongoing resilience of the buy-to-let sector, stating: “Despite the government’s best efforts, the buy-to-let sector continues to offer an abundance of opportunity for bricks and mortar investors. There are a wealth of areas boasting very strong yields in the current market.”
Central London boroughs post biggest annual yield improvements
While yields in prime London boroughs remain relatively modest, they’ve seen the most notable annual increases. The City of Westminster saw rental yields grow by 1.36% year-on-year, now sitting at 4.38%. Kensington and Chelsea followed closely with a 1.08% rise to 3.88%.
These figures are particularly striking, considering these areas are traditionally seen as capital growth hotspots rather than yield-focused zones. The trend suggests that rental values are finally catching up with property prices in some of London’s most exclusive postcodes.
Elsewhere in the capital, Islington (up 0.74%), Hammersmith and Fulham (0.73%), Brent (0.71%), and Hackney (0.66%) also made the top 10 for yield improvement, highlighting a broader strengthening across the London market.
Wales sees yield boost beyond the capital
Outside London, Wales is showing solid upward momentum. Merthyr Tydfil not only ranked second nationally for yield levels but also saw a significant 0.89% improvement over the past 12 months. Newport and Torfaen followed suit with increases of 0.71% and 0.57% respectively, bringing their average yields to 4.90% and 5.28%.
This upward pressure in rental values comes at a time when supply shortages and tenant demand continue to shape the housing landscape in regional areas.
Self-management trend gains traction among landlords
As rental returns improve, many landlords are seeking ways to reduce costs and maintain control over their portfolios. Cohab reports that 60% of landlords now self-manage their properties, a number that’s expected to rise with the growing availability of streamlined property management platforms.
Kotz added: “Our free-to-use, end-to-end platform helps landlords significantly reduce the admin involved in managing their properties, while remaining fully compliant in what has become an increasingly turbulent space for legislation and regulation.”
By taking advantage of digital tools and staying on top of changing market dynamics, landlords can not only safeguard their returns but increase them—even in a challenging economic climate.
As rental yields rise across the UK, particularly in northern cities and rebounding London boroughs, the data offers a timely reminder of property’s enduring strength as a long-term asset. For landlords who adapt—whether by switching to self-management or identifying high-yield areas—the opportunities remain plentiful.
