A £25,000 budget would be enough to cover the £15,530 deposit on an average flat, plus stamp duty. A cash sum of this size would also just about cover a 25pc deposit on an average terraced house in the area, but investors would need to find another £3,000 to pay stamp duty. 

Landlords can expect rental income of £5,065 a year from a flat, after mortgage payments and a 10pc provision for maintenance costs, according to Hamptons. Annual income rises to £8,168 on a terraced house. 

Investors in neighbouring Merthyr Tydfil receive similar yields at an average of 9.8pc. An average 25pc deposit on a flat in the area is £14,990, rising to £25,830 for a terraced house and pushing the latter almost £4,000 over budget once stamp duty is taken into account. 

Rental income in the area, which sits south of the Brecon Beacons national park, is slightly lower than in Blaenau Gwent. Landlords can expect an average income of £4,518 from a flat and £7,787 from a terraced house after mortgage and maintenance costs. 

Emma Liverick of Bidmead Cook Estate Agents said tenant demand in Merthyr Tydfil had reached “unprecedented” levels, with properties being snapped up within two days of listing. 

“There is huge interest from investors, especially from London and Bristol, because soaring rents in the area are offering good yields, despite property prices also having risen,” she said. “The lack of homes to let has pushed up rents massively in the past nine months. Where once a three-bedroom terraced house might list at £500 a month, the average is now between £675 and £700.”

Hartlepool and County Durham 

Two of the highest yielding locations for landlords with £25,000 to spend can be found in the North East of England.

The port of Hartlepool is a rental hotspot for modest budgets, with an average gross yield of 10.3pc. A typical flat in the area costs £66,680, meaning investors will need £16,670 for a 25pc deposit and a further £2,000 to pay stamp duty. 

An average terraced house is cheaper in Hartlepool than in Blaenau Gwent or Merthyr Tydfil and £25,000 opens up a greater choice of investment. The typical home of this type costs around £89,600, according to Hamptons, requiring £25,100 for a deposit and stamp duty.