The city is showing average buy to let returns on investment of 8.73% a year ' up nearly 12% on last year?s yield.
In comparison, although house prices in the capital are soaring, the top London yield was just 6%.
The fastest growing yields are in Reading, Berkshire (12.8%) and Brighton, West Sussex (12.6%), says a report from HSBC Bank.
In Southampton, explains the report, landlords can buy comparatively cheap homes and charge high rents due to strong demand from seasonal workers and students.
Peter Dockar, head of mortgages at HSBC, said: 'Landlords are reaping the benefit as young professionals say goodbye to London in favour of more affordable commuter towns. Despite the inevitable increase in commuter costs, many still feel the move is worthwhile to save a deposit to buy their own home.
?House prices in these locations ' while still out of reach among many first time buyers ' are relatively affordable for landlords investing in property and the demand from young professionals has pushed up rents and driven up the returns.?
The report also pointed out that many of the places with top buy to let yields have strong student letting markets.
Britain’s top buy to let hot spots
|Rank 2014||Location||Rank 2013||% of Housing Stock Privately Rented||Average House Price||Average Rent (Monthly)||Average Rent (Annual)||Rental Yield 2014 (gross)||% Year-on-Year Yield Growth|
Source: HSBC Bank
Article courtesy of LandlordZONE