New data from Paragon shows that for the last 12 months (up until June 2025) Cardiff had the largest number of BTL mortgages granted. With over 32,000 students enrolled at Cardiff University, the strong student market has helped increase the number of student renters and therefore landlord interest has grown too.
The CF24 postcode (that took the top spot for BTL investment) covers central Cardiff which includes part of the city centre, Cathays, Roath, Plasnewydd, Splott and Adamstown.
Properties in the area
According to MortgageSolutions, the Paragon report showed that “42% of properties in the area are privately rented and the average yield comes to 8.9%.”
Again, it is noted that many of the private rentals are rented to students from the local universities: Cardiff University, Cardiff Metropolitan University and the University of South Wales.
Second spot for investment
Taking the second spot for BTL investment is Plymouth with its PL4 postcode. This is Plymouth’s first time making it onto the list and sources suggest that its investments have increased due to it being a student hotspot.
MortgageSolutions say the rental yields in the area are also quite high at 10.2%, with this figure being the highest out of all areas on the top 10 list.
Top 5
The Paragon data shows the following areas to be the top 5 spots for investments:
- Cardiff takes top spot
- Then Plymouth
- Loughborough’s LE11 postcode area takes the third position. Last year, it rested at eight position, so the increase shows a strong performance provided by students and large local workforces.
- Nottingham’s NG7 postcode is proving to remain stable in fourth position for BTL investment.
- In fifth, is Gloucester’s GL1 postcode.
Similarities between properties in the top 5 areas
Louisa Sedgwick, managing director at Paragon Bank, noted that, “Terraced houses were the property type most often bought by landlords in each of the hotspot locations.”
She says that smaller terraces are often more affordable than other property types, this makes these property types a good place for newer landlords to start when building their portfolio, or is suitable for those looking to expand their portfolios.
Sedgwick also says, “At the other end of the scale, houses of multiple occupation (HMOs) are often classified as terraced properties but benefit from typically higher yields owing to the capacity for multiple tenancies.”
What to expect next year
Whilst some areas have stayed consistent in terms of BTL investment, we could see some major changes due to the implementation of the Renters’ Rights Bill. Rent caps are expected to make some significant decreases to the number of landlord investments.
