The North West of England is the most lucrative region in the UK for private rented sector landlords with Manchester and Liverpool coming out top for rental yields.

The latest quarterly report from LendInvest also shows that Cardiff, Coventry and Oldham come next, followed closely by Sunderland, Blackburn and Durham

The report, which tracks changes in trends in rental yields, capital gains and landlords’ total return on investment, also shows that London and the South East still lead house price growth.

Indeed, all of the top 15 performing postcode areas for capital gains are located in London and the surrounding area. However, inner London takes only 18th place for rental yield, but is top for capital gains

Christian Faes, CEO at LendInvest, believes that tax changes could impact the market next year. He said: "There could be some weakening in London’s dominance of capital gains tables if house price growth does soften slightly as forecast, and as new buy to let stamp duty hikes take effect."