A recent piece on the property news site Property118 offers a first-person view of the shift from hands-on landlord to private lender. The author, an experienced investor, details their move into a 10 per cent loan note, walking through the verification of the borrower's track record, security arrangements and the legal framework that shields their capital.
The narrative is frank about the dangers: a clear warning states that investors must be ready to lose their entire outlay. A commercial disclosure also notes that Property118 could receive an introduction fee if a reader invests. For a generation of buy-to-let owners facing tighter margins, such high-yield yet high-risk alternatives are becoming part of the conversation.
Where renters concentrate
While some former landlords redeploy capital into loans, the rental market from which they came retains its significance. Postcodes UK has examined official census data to pinpoint the postcode district with the highest proportion of renters. That district is LS2, covering central Leeds, where 11.1 per cent of the population are tenants.
| District | Post town | Region | Homes owned |
|---|---|---|---|
| LS2 | Leeds | Yorkshire and The Humber | 11.1% |
| SR1 | Sunderland | North East | 11.9% |
| S1 | Sheffield | Yorkshire and The Humber | 13.3% |
| BD1 | Bradford | Yorkshire and The Humber | 13.5% |
| LE1 | Leicester | East Midlands | 14.8% |
| L1 | Liverpool | North West | 15.1% |
| HU1 | Hull | Yorkshire and The Humber | 16.1% |
| NE1 | Newcastle upon Tyne | North East | 16.1% |
| M50 | Salford | North West | 16.9% |
| EC1N | London | London | 17.2% |
The full table below lists additional districts and their renter shares, drawing on the latest ONS census figures.
Lending versus letting in a renter hotspot
The LS2 figure, though a snapshot, illustrates the intense demand that once persuaded investors to buy in university and city-centre areas. Yet high rental density can also mean greater exposure to legislative changes, such as selective licensing schemes or evolving eviction rules. The property owner who authored the Property118 piece may well have weighed such burdens before opting for a loan-based return. For investors who once relied on rental income, a 10 per cent loan note can seem a more passive path, provided they accept the credit risk.
Data from HM Land Registry, also included in the wider Postcodes UK analysis, shows that house-price movements in LS2 influence local yields. When capital appreciation slows, the appeal of a fixed return becomes clearer. It is no surprise that landlords keep a keen eye on postcode-level figures when choosing between direct letting and becoming a lender.
The data behind this
The renter statistics are sourced from the 2021 ONS census, aggregated at postcode district level by Postcodes UK. Property transaction data in the accompanying table comes from HM Land Registry. All postcode boundaries and demographic insights are maintained in the Postcodes UK database, ensuring accuracy for property professionals and investors alike.
In response to reporting by Property118. Analysis and figures by Postcodes UK.