The LendInvest buy-to-let index ranked 105 postcode areas based on a combination of capital value growth, transaction volumes, rental yield and rental price growth.
Colchester, Romford, Birmingham and Manchester made up the rest of the top five in the quarterly report.
The top 10 buy-to-let postcodes
East central London and Durham were the two worst-performing areas in the index, with the former recording -13.86% with regards to capital gains.
The bottom 10 buy-to-let postcodes
LendInvest also published a special feature which investigated the reasons why transaction volume growth had slowed by as much as -6.77% on average across the UK.
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Transaction Volume Growth slowdown
Ian Boden, sales director at LendInvest, said: “It’d be so easy to look at the underlying data that tells us transaction volumes are down and make dire predictions about the health and wealth of the rental market.
“Instead, what our index proves once again is that looking at one metric in the housing market is never enough.
“Each of the very top performing BTL locations this quarter is experiencing a slowdown in transactions – substantial falls in places, dips in others.
“But, the best places this quarter continue to outperform the competition well, thanks to strong performances on other, equally important, metrics like rental yield, capital gains and rental price growth.”
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