Best overlooked towns for buy to let yields revealed

Landlords looking for the best opportunities in buy to let investment should consider research revealing the UK’s most promising local authorities for rental returns.

The study by Archimedia Accounts highlights where affordable properties in the country’s most overlooked towns have robust rental demand.

The firm’s co-founder, Chris Demetriou, said: “With the cost-of-living crisis, we’re seeing more and more small landlords exit the rental market due to rising costs, falling yields and increasing regulatory pressures.

“Buy to let can quickly become stressful and financially risky if not carefully planned.

“Yet the UK’s housing demand continues to outpace population growth, keeping the market alive and, in some areas, thriving.”

Overlooked investment hotspots

He continued: “In Q1 2025, buy to let lending surged, with £10.5 billion of new loans issued, while the average interest rate on new mortgages eased to 4.3%.

“Gross rental yields inched upward too, reaching 6.94%.

“These figures reflect a market that, while undeniably competitive, still presents compelling opportunities for well-informed investors.”

He adds: “While smaller landlords without existing wealth may feel discouraged, this study highlights that often-overlooked towns and cities, like Boston, Blackpool, and Bolsover, can still deliver strong returns.”

• Boston, Lincolnshire

Topping the list is Boston, a Lincolnshire market town of roughly 71,080 residents. Here, a one-bedroom flat averages £80,402, with monthly rents of £495, translating to £5,940 yearly. After factoring in Stamp Duty Land Tax (SDLT) of £2,412.06 and solicitor fees of £1,220, investors can expect a gross yield of about 7.07%, the highest in the study. Boston’s appeal lies in its low property costs, proximity to coastal cliffs, and connectivity to Nottingham and Leicester, both under two hours away. This makes it ideal for landlords targeting affordable flats near vibrant areas or for remote workers seeking scenic, well-linked locales.

• Blackpool, Lancashire

Blackpool, a bustling seaside town with 144,191 residents, secures second place. A one-bedroom flat here costs around £74,364, generating £412 monthly or £4,944 annually. After SDLT of £2,230.92 and solicitor fees of £1,220, the gross yield reaches approximately 6.35%. With a population growth of 0.8% from 2023 to 2024 and a tourism-driven economy, Blackpool offers seasonal rental demand. Its location, less than 90 minutes from Manchester and Liverpool, enhances its allure for investors seeking high-yield properties in dynamic, growing towns.

• Bolsover, Derbyshire

In third place, Bolsover, Derbyshire, with 83,773 residents and a 1.2% population increase from 2023 to 2024, offers a compelling option. A one-bedroom flat averages £99,302, with monthly rents of £483, or £5,796 annually. After SDLT of £2,709.06 and solicitor fees of £1,220, the gross yield is around 6.15%. Just 18 miles from Sheffield and 26 miles from Nottingham, Bolsover blends short commutes with a tranquil setting. Its historic castle and proximity to the Peak District add lifestyle value, making it a smart pick for investors eyeing both returns and long-term potential.

• Kensington and Chelsea

At the opposite end, Kensington and Chelsea, home to 144,518 people, ranks as the least lucrative for buy to let. Known for landmarks like the Natural History Museum and Kensington Palace, the borough’s one-bedroom flats average £1,126,592, with monthly rents of £1,798, or £21,576 yearly. However, a hefty SDLT of £87,706.96 and solicitor fees of £2,520 reduce the gross yield to just 1.77%. The area’s prestige and high rents are overshadowed by steep property prices, making it viable only for wealthy investors.

The research shows the other towns worth considering include Middlesbrough, Sunderland and Fenland.

Landlords could also look at Redcar and Cleveland, Hartlepool, Hyndburn as well as Telford and Wrekin.