If you want to make the best investment in Luton, it’s essential to research the best areas to invest.
This is because not every area is the same for investment. Some regions generate higher returns and demand from residents.
With this in mind, we’ve made a list of Luton’s best buy to let areas for 2023 and 2024, so you know exactly where to invest.
Keep reading to see the best places to invest in Luton, with the latest house prices Luton offers.
Central Luton – LU1
Avg. House Price: £295,261
Avg. Gross Rental Yield: 3.69%
At Luton’s epicentre, central Luton is a fantastic location for those looking for the best places to invest in Luton.
Containing wards like Dallow, Farley, and South, the LU1 postcode currently offers the most affordable property prices on this list at only £295,261.
Better yet, the region has seen property prices grow by a whopping 56.06% in the last 10 years, according to Zoopla.
There’s a good reason behind this sizeable growth, too.
Not only is LU1 home to the University of Bedfordshire, making student property investment booming, but the region is also blessed with world-class transport links.
London is just 22 minutes away from Luton town centre, with railway connections to Leeds and Sheffield, all the way to Brighton and Gatwick.
While returns are only 3.69% compared to the town’s average gross rental yield of 4.22%, central Luton is a crucial investment hotspot with room to earn far higher returns.
For this reason, LU1 is likely the best place to buy investment property in Luton.
LU2
Avg. House Price: £331,701
Avg. Gross Rental Yield: 3.87%
Another area widely considered one of the best areas to invest in property in Luton is the LU2 postcode.
Home to areas like Crawley, High Town, Round Green, Stopsley, and Wigmore, LU2 is a more affluent Luton area, and this is clearly seen in the property prices.
You can expect average house prices in Luton of almost £330k, significantly higher than 10 years ago
LU2 is also the site of London Luton Airport, which is a massive contributor to employment in the area.
Due to the property prices and rental yields, investment properties in Luton LU2 won’t be available to everyone.
For this reason, LU2 is a Luton area you should avoid as an investor if you don’t have the cash available, but it is still one of the best areas in Luton to live.
LU3
Avg. House Price: £326,923
Avg. Gross Rental Yield: 3.86%
The third area in our list of the best places to buy property in Luton is the LU3 postcode.
Found to the North of Luton, LU3 features Barnfield, Biscot, Bramingham, Limbury, Northwell, Saints, and Sundon Park.
A popular family area, this leafy green region sees average house prices of just £326,923, with its most popular house type being semi-detached houses.
Rental returns here are some of the highest on this list, with average Luton returns of 3.86%.
Meanwhile, property prices have grown in the area by a sizeable 51.49% from 2011 to 2021.
For these reasons, LU3 is one of the best areas to invest in property in Luton.
LU4
Avg. House Price: £313,368
Avg. Gross Rental Yield: 4.22%
The final postcode on our list of the best Luton buy to let areas is LU4.
Found to the west of Luton, LU4 consists of areas like Challney and Lewsey, and is a popular area for commuters thanks to the nearby access to the M1.
Another area considered one of the best areas in Luton to live, LU4 has a bunch of grade-listed buildings, making it a charming part of Luton.
Property prices have increased by over 52% from 2011 to 2021, with rental returns one of the highest on this list at 4.22% in 2023.
However, due to the reasonably sizeable property prices of over £295k, LU1 is still likely the best area in Luton for investment.
That being said, if you’re an investor looking for property and want to find a Luton property for sale, LU4 is an excellent choice.
Dunstable
Avg. House Price: £317,652
Avg. Gross Rental Yield: 3.85%
Although not technically in Luton, Dunstable is a nearby town worth considering when looking at the Luton area.
Found across the M1, Dunstable has a robust commercial backbone with plenty of jobs on offer from Amazon and Superdrug.
Notably, a recent new junction added to the M1, the 11a, has freed up more land in the area.
This leaves the potential for future regeneration in the Dunstable area, with 5,000 new homes already planned for the coming years.
However, while gross rental yields are far higher, it’s NET yields that you should be interested in, with some Luton properties offering incredibly high NET yields.
The Hive, for instance, currently generates NET yields of over 5%.