Aldermore’s latest Buy-to-Let City Tracker found Manchester held onto its place as the top city for BTL investment for another year, followed by Glasgow, Coventry and Wigan.
The tracker looked at average total rent, short-term yield, long-term house price growth, vacancy rates, and the percentage of renters in each city.
The research found demand was strong in leading cities, with an average yield of 7.4%.
Average rent per room increased from £518 in 2024 to £556 in 2025.
Short-term returns rose from 6.9% in 2024 to 7.4% in 2025.
Manchester led with house prices rising by 6.3%, the highest share of private renters at 32% and one of the lowest vacancy rates at 0.8%.
Short-term yields in Manchester were 7.2%. Glasgow stayed in second place with short-term returns at 9.9%.
Liverpool, Derby and Telford entered the top 10 for the first time.
Stoke and Doncaster had the biggest jumps up the table, with short-term yields at 8.9% and 9.1%, but both had higher vacancy levels.
Aberdeen was at the bottom of the table, with prices falling by an average of -3.9% a year since 2015 and the highest national vacancy rate at 4.5%.
Jon Cooper, director of mortgages at Aldermore, said: “Unlike previous years, this year’s Buy to Let City Tracker has seen noticeably less reshuffling within the top ten, suggesting the market is beginning to stabilise.
“That relative consistency comes despite a more challenging backdrop for landlords both economically and because of more restrictive regulation.
“There’s no doubt that the operating environment has become more complex.”
Cooper added: “Increased regulation and evolving tenant expectations mean landlords need to be far more hands-on, regularly reviewing their portfolios, reassessing yields and ensuring their properties remain competitive.
“However, the fundamentals remain supportive. Demand for well-located rental homes continues to outstrip supply in many cities, rental income has held firm year-on-year, and competition for quality stock remains high.
“For landlords prepared to adapt and take a long-term view, there are still resilient and attractive returns to be found.”