The latest list of top buy-to-let hotspots has revealed that Nottingham and Liverpool are the best places for rental yields, averaging at 6.2%.

In 2016, Liverpool topped the list, but an average £121 a month rent rise in Nottingham has meant that the Midlands city is now joint equal at the top of the 2017 list, according to the Nottingham Post.

Adam Kingswood, of Nottingham lettings firm Kingswood Residential, commented on the city’s position:

“Because of the shortage of property and more tenants moving to the area – those being drawn to our two excellent universities, hospitals and big employers like Boots, E.ON and Experian – rents are being driven up. There are not enough houses compared to tenants.”

He called for more landlords to invest in Nottingham property to help fulfil the high demand for rented properties in the area. Kingswood said that with high rents, minimal void periods and good yields, investing in Nottingham buy-to-let property compares well with other investment strategies.

Below Nottingham and Liverpool in the hotspot list are Cardiff with rental yields of 6.0%, with Southampton and Manchester on yields of 5.9%.

Although interest rates on commercial mortgages used to purchase buy-to-let property rose slightly following the Bank of England’s rate rise, the average fixed rate for a 75% loan-to-value loan is 2.47% which is the lowest rate since 2012. This has reduced average mortgage costs and made buy-to-let investing profitable, provided landlord carefully select the right locations.