A leading data insight company has revealed the best places in the UK to buy an investment property.

Address Intelligence has been on the hunt for the UK’s best areas for investors and found that the average return on investment from letting out a property in the UK is 5%, but this varies drastically when broken down city by city.

According to its findings, the top 10 places to invest in a rental property are: Sunderland, Blackburn, Durham, Blackpool, Oldham, Cleveland, Liverpool, Wigan, Bolton and Manchester.

Investing in a rental property in Sunderland can earn an investor 7.27% back in rental payments in year one, the research found, with average monthly rent of £697. It would take an investor 14.2 years to pay off their property.

When split by property type, the data found that a terraced house in Sunderland makes the greatest return, with a semi-detached and bungalow coming in second and third.

Terraced housing in Blackburn, Blackpool and Cleveland also made the list, while a detached house in Sunderland was tenth on the list, making the Wearside port city the best place to buy an investment property across most property types.

Sunderland, often viewed as one of the most neglected and left behind cities in the UK, struggling to awaken from its post-industrial slumber, has in recent years seen a massive increase in both public and private investment. It’s estimated that, by 2024, over £1.5 billion will have been invested in a bid to transform the city centre.

The ‘evolving city centre’ has brought with it many new job opportunities, making Sunderland a more desirable place to live, according to Address Intelligence.

The city also has a large student population – being home to the University of Sunderland and its approximately 15,000-strong intake – which is likely to make it attractive to property investors with student housing particularly profitable in normal times as the property can be rented out on a room-by-room basis.

Sunderland has also received far more acclaim and international attention thanks to its starring role in the hit Netflix documentary Sunderland ‘Til I Die, which documents the highs and lows of the club and its fans.

Blackburn, another booming industrial hotbed which has fallen on harder times in recent decades, has also received significant investment in recent times, with the newly renovated Cathedral Quarter central to its transformation. The town now boasts a host of new offices and refurbished college and university campuses.

In third place is the picturesque riverside city of Durham, famous for its university and stunning cathedral, which has one of the highest rental values of anywhere in the UK, offering up an opportunity for property owners to make £873 per month per house. Like Sunderland, it has a sizeable university population, while many graduates decide to stay put even after university.

By contrast, the research found the bottom 10 places to invest in a rental property in the UK are:

1. West London                                                                                                        

2. Llandrindod                                   

3. St Albans                                        

4. Watford

5. Hereford

6. Bromley

7. Cambridge

8. Dorchester

9. Slough

10. North West London

With property prices being extremely high, it comes as no surprise that West London is the least profitable place to buy a rental property in the UK. The average house there is valued at £930,790, meaning it would take an investor 27 years of rental income to pay off their property.

Llandrindod, a small town in Wales, also sits at the bottom of the list, despite (or perhaps because of) it being recently voted in the top 5 happiest places to live in the UK. With this popularity in mind, property prices are steep, and an investor can expect to only earn a 3.7% return per year based on the average annual rental income of £8,361.

When split by property type, the lowest rate of return across the whole of the UK is for a detached house in historic St Albans. Investors in the cathedral city – known as Verulamium during its Roman heyday – will only earn a 3.5% return each year. What’s more, with the average house valued at £983,979, it’s one of the most expensive places to purchase a property the UK.

You can see the full list below.

1. Sunderland

2. Blackburn

3. Durham

4. Blackpool

5. Oldham

6. Cleveland

7. Liverpool

8. Wigan

9. Bolton

10. Manchester

11. Newcastle

12. Doncaster

13. Halifax

14. Cardiff

15. Sheffield

16. Huddersfield

17. Wakefield

18. Bradford

19. Stoke on Trent

20. Telford

21. Warrington

22. Wolverhampton

23. Darlington

24. Hull

25. Chester

26. Swansea

27. Preston

28. Nottingham

29. Coventry

30. Dudley

31. Leeds

32. Walsall

33. Romford

34. Peterborough

35. Birmingham

36. Colchester

37. Newport

38. Medway

39. Brighton

40. Llandudno

41. Southend

42. Crewe

43. Luton

44. Lincoln

45. Northampton

46. Milton Keynes

47. Stockport

48. Derby

49. East London

50. Dartford

51. Southall

52. Portsmouth

53. Bristol

54. Carlisle

55. Lancaster

56. South East London

57. Leicester

58. Ilford

59. Canterbury

60. Plymouth

61. Norwich

62. Oxford

63. Croydon

64. Truro

65. Southampton

66. Bath

67. Enfield

68. Bournemouth

69. Swindon

70. York

71. Sutton

72. West City London

73. Ipswich

74. Gloucester

75. Guilford

76. North London

77. Chelmsford

78. East City London

79. Harrow

80. Twickenham

81. Redhill

82. Tonbridge

83. Worcester

84. Hemel

85. Harrogate

86. Shrewsbury

87. Stevenage

88. Exeter

89. Kingston

90. Taunton

91. Salisbury

92. Reading

93. South West London

94. Torquay

95. North West London

96. Slough

97. Dorchester

98. Cambridge

99. Bromley

100. Hereford

101. Watford

102. St. Albans

103. Llandrindod

104. West London