Best Places to Invest in UK Property 2025 | Joseph Mews (2024)

More than ever, now is the best time to invest in property. With interest rates lowering as 2024 progresses, and the market continuing to grow, many investors are considering where to invest in UK property. While buyers consider where to invest money in the UK, we’re exploring their key considerations. Namely, where are the best places to invest in UK property in 2025 and, if you know where to invest, what should you be looking for?

Birmingham remains one of the best places to invest in UK property in 2025 due to the sheer amount of regeneration, demand and growth it is forecasting for the years ahead. Most promising is the Future City Plan which is set to revolutionise the city, adding new mixed-use developments and public spaces – it’s no wonder Birmingham is forecasting price rises of 19.9% by 2028 according to the latest JLL forecasts.

Average rents in Birmingham have risen by a huge 22% over the past five years according the Land Registry House Price Index, demonstrating just how reliable rental growth is in the UK’s second city. This isn’t surprising considering the overwhelming success of the Commonwealth Games, continuing construction of HS2 at Curzon Street, and the abundance of inward investment. Even better, more residents and businesses are viewing Birmingham as a viable alternative to London, which is contributing to greater tenant demand. This makes Birmingham one of the best places for buy-to-let in the UK. Other aspects causing prices in Birmingham to increase are:

• A rising population forecast to hit 1.23 million by 2038

• Tenant demand from young professionals leaving London for Birmingham’s affordability
• A 41% graduate retention rate bringing in new young professionals seeking rental accommodation

The Birmingham property investment market is largely made up of one and two-bedroom apartments throughout the city-centre. In areas like Selly Oak, rental yields of up to 7% can be achieved, while a solid residential pipeline is highlighting new standards of living in city centre developments such as SETL and The Colmore.

In terms of where to invest, transport links also remain a key factor for Birmingham’s success. Aside from the world-class links from Grand Central and Birmingham International Airport, the second city will also soon be a major hub for HS2 towards London. Despite the extension of HS2 to Manchester being cancelled, the project still remains the most exciting infrastructure development in a generation and a key reason for Birmingham being one of the best areas when investing in UK property.

Best Rental Yields in Birmingham

B29 – Selly Oak – 7%

B9 – Bordesley Green – 6.5%

B18 – Hockley – 6.5%

B15 – Edgbaston – 6.4%

B1 – City Centre – 6.1%

If you’re asking yourself, why invest in UK property in 2024, Derby may be an easy answer as to why you should.

A city at the very heart of the UK, Derby bridges the gap between the North and the South and is one of the leading lights of the East Midlands. Currently undergoing a major regeneration project – the ‘2030 Derby Masterplan’ – that is transforming the local landscape, Derby property price forecasts for 2025 suggest prices could increase by 22.8% over the next four years. This isn’t to mention the impressive growth Derby property has undergone over the past 5 years of over 23%, making Derby one of the best places for buy-to-let in the UK.

Derby’s exceptional growth is underpinned by its youthful population and exceptional connectivity. The city has 17 universities all within an hour’s travel and is home to a student base of 34,000. With around 48% of Derby’s population under-35, there is huge potential demand for rental properties, especially considering Derby’s popularity with graduates:

• 23% of graduates go to University of Derby and stay for work
• 46% of graduates move to Derby for work

Derby has the 7th highest graduate wage in the UK – £24,100 (vs UK average of £23,100)

It’s this younger demographic that is driving the success of Derby’s rental market and reinforcing it as one of the best places to invest in UK property in 2025. Rents increased by 9.3% since from May 2023 to 2024 – a significant jump that accelerated average rents from £684pcm to £748pcm – and this looks set to continue as demand continues to outpace supply, a factor that will no doubt drive rental yields in Derby.

Aside from its graduate retention, Derby is also driving new demand through its exceptional career opportunities. With several large-scale businesses – including Bombardier, Rolls-Royce and Toyota – contributing over 45,000 jobs to the local economy, there’s a huge amount of working professionals within the market that are helping push prices in a positive direction, helping Derby’s claim as one of the best places to invest in buy-to-let property in 2024.

Best Rental Yields in Derby

DE1 – City Centre – 6.0%

DE75 – Heanor – 4.5%

DE24 – Alvaston – 4.5%

DE45 – Bakewell – 4.3%

DE21 – Chaddesden – 4.3%

Investing in UK property with a specific interest in the North? Leeds has earned itself a reputation as one of the best places to invest in UK property in 2024 because of the strong rental returns units in this city can provide. As the second-largest banking and finance sector in the UK, Leeds has a huge pull with professionals in these sectors, which is driving demand for the rental market and subsequently pushing up rental prices. This makes the city a fantastic option for those searching for the best place to buy-to-let in the UK.

With a population of around 800,000, including a large student population from establishments such as the University of Leeds, Leeds Beckett University and Leeds Trinity University, making the city a top destination for investors seeking long-term, consistent tenant demand.

What’s more, Leeds has one of the fastest growing economies in the country and now rivals several larger European cities, which is enticing working professionals seeking higher salaries. This is reflected in the number of people moving from London to Leeds, which has doubled over the last decade, demonstrating that this Northern Powerhouse has widespread appeal to renters across the UK.

Although Leeds’ price growth in the past has been minimal compared to its peers, the market has largely been buoyed by its excellent rental demand. Recent forecasts state that Leeds’ growth will far outweigh that of the national average, with JLL suggesting that the UK average cumulative house price growth will sit at 17.6% by 2028 compared to 18.8%, firmly putting Leeds ahead of the average UK city. So, if you’re searching for the best UK city to invest in that is set to exceed the growth trajectory of the rest of the nation, you should strongly consider Leeds.

Best Rental Yields in Leeds

LS3 – City Centre – 12%

LS2 – City Centre – 8.3%

LS4 – Burley – 8.2%

LS9 – Harehills – 7.7%

LS6 – Headingley – 7.5%

Watch the ‘Best Places to Invest’

Leeds’ neighbour, Bradford, has also earned its spot on our list of places to invest in the UK. Bradford is on an impressive journey of modernisation and redevelopment, and has earned the title of 2025 City of Culture, which is expected to stimulate economic growth of £700 million, bring 15 million visitors to the region, and create 3000 jobs. It’s no wonder Bradford has claimed the title of City of Culture – it was the first UNESCO City of Film, and home to the first IMAX cinema in Europe. As such, Bradford is attracting creatives not just from across the UK, but from across the globe, generating significant demand for property in the city.

Investment in Bradford is also exceptionally strong. £5 billion has been allocated to Bradford in infrastructure investment to make this northern city more connected. A new train station will create 27,000 new jobs, the West Yorkshire Mass Transit system will improve links between Bradford and other cities such as Leeds and Huddersfield, and £100 million investment in Leeds Bradford Airport will make the city more accessible to global markets. It’s not just the transport sector in Bradford which is seeing huge redevelopment – Bradford is in the midst of an ambitious regeneration programme. From the City Village project that is taking place in the city core, creating 1,000 new homes and 400 jobs, to the £35 million One City Park commercial office regeneration, and rejuvenation of the Bradford Live venue expected to attract 300,000 visitors annually – there’s no shortage of investment in Bradford.

This high level of investment is making Bradford an attractive place to live for tenants, giving landlords in the city centre access to yields as high as 12%. Better yet, Bradford property is among some of the cheapest on our list of places to invest, with the average property costing just £175,000 – that’s more than £100,000 below the national average. What’s more, such abundant investment in the city has made the future of capital growth in Bradford bright, with Savills predicting that house prices across broader region could see a boost in value of 28.2% from 2024 to 2028.

Best Rental Yields in Bradford

BD1 – City Centre – 12%

BD3 – Barkerend – 6.6%

BD7 – Lidget Green – 5.7%

BD2 – Bolton Outlanes – 5.3%

BD8 – Girlington – 5.2%

A list of the best places to invest in UK property in 2025 wouldn’t be complete without the addition of Manchester, and with good reason. This Northern city is known among investors for its history of impressive capital appreciation, with property values having increased by over 30% over the last five years alone, with average house prices in 2019 sitting just below £180,000.

While Manchester doesn’t have the youngest population on this list – a common indicator of rental demand – the average age is 33 and the city still experiences fantastic rental demand. Furthermore, Manchester is home to over 100,000 students and has the second best graduate retention rate, being beaten only by London, making it a prospective rental hotspot that earns it a space on this best places to invest list.

The city has also been recognised as a top location for business start-ups, with incredible employment opportunities available at multi-million pound regeneration projects such as Spinningfields and MediaCityUK. This level of regeneration is set to bring an additional 100,000 people and 65,000 jobs to the region by 2036, catapulting tenant demand and certifying Manchester as an investment hotspot.

This is a significant reason why Manchester is anticipated to see the fastest rate of employment growth across the UK between 2024 and 2026, making it a leading destination for young professionals and one of the best places for buy-to-let. It’s no wonder that Manchester has the third highest projected rental growth in England for 2024 to 2028 at 21.7% according to JLL, being marginally outpaced by Birmingham.

Future growth looks set to help Manchester maintain its reputation for strong capital growth, with property prices expected to rise by 19.3% over the next four years based on JLL’s forecasts. This will be driven by the city’s rapidly growing economy and population – key metrics when answering: why invest in UK property in 2025?

Best Rental Yields in Manchester

M14 – Fallowfield – 10.1%

M12 – West Gorton – 7.3%

M11 – Clayton – 6.9%

M5 – Salford – 6.6%

M18 – Gorton – 6.6%

Sheffield is a clear contender for investors asking where to invest due to its exciting future potential. The city is currently entering the early stages of its next property cycle and the number of redevelopment schemes underway are starting to reflect this.

This city is experiencing exceptional amounts of investment and regeneration. Around £480 million has been spent on developing Sheffield’s retail sector, showing a commitment to meet the demands of a rising population. For city-centre and Sheffield North postcodes such as S1 and S3, this has helped develop one of the best places to invest in rental property, with developments achieving rental yields up to 8%. This is an increase from last year, where rental yields sat at a peak of 7.6%, demonstrating that the vast regeneration of Sheffield is already paying off for investors.

A strong development pipeline looks set to keep driving this momentum, with numerous projects being planned as part of the ‘Heart of the City’ scheme. This will add to a city that is already overflowing with music venues, entertainment spaces and cultural hotspots. It’s these amenities that support the most exciting areas to invest in property and Sheffield has an excellent foundation to start building on.

Best Rental Yields in Sheffield

S3 – Netherthorpe – 8%

S1 – City Centre – 7.1%

S5 – Longley – 6.9%

S9 – Greenland – 6.3%

S2 – Arbourthorne – 6%

Liverpool remains a clear contender for buyers considering where to invest in the UK due to its impressive affordability and rental returns. City-centre postcodes in Liverpool are delivering incredible yields far in excess of the national average of 4.75%, while continued regeneration continues to help support rising property prices.

While historic price growth has been weaker than most on this list, property forecasts for the broader North West region suggest that Liverpool could see values rise by 28.8% over the next four years. This would cement it as one of the best cities to invest in the UK for capital growth, whilst still making Liverpool property affordable for investors. Having one of the most affordable property markets, yet also being able to command exceptional rents because of the world-class amenities, job opportunities and the lifestyle Liverpool can provide, makes the city a hotspot for investors in 2025.

This is once again reflected in Liverpool’s income to house price ratio of 5.98, which is 7th best in the UK and significantly better than the national average of 8.8. The city has a workforce earning salaries that are disproportionately higher than its property values, which can be useful for determining potential rental hotspots within the city’s borders.

In terms of regeneration, Liverpool is driving some of the most ambitious projects in the country. Liverpool Waters has been one of the most impactful so far and represents a £5 billion investment over 30 years, designed to deliver new spaces, tourism and nearly 17,000 new jobs for the economy. This is sure to generate even more tenant demand across the city that could lead to fantastic yields and capital appreciation for investors who snap up high-quality properties in Liverpool sooner rather than later.

Best Rental Yields in Liverpool

L4 – Anfield – 7.8%

L5 – Everton – 7.5%

L11 – Norris Green – 7.2%

L2 – City Centre – 7.2%

L8 – Toxteth – 6.9%

As one of the most affordable locations on this list and the 8th largest city in the UK when measured by population, Newcastle remains one of the best buy-to-let areas in the UK because of its incredible graduate retention rate and its growing population.

It is also worth noting that Newcastle is one of the best ‘start-up incubators’ in the country, attracting entrepreneurs from across the nation to set up shop. This in turn attracts young professionals who are looking for employment opportunities, welcoming more individuals into the Newcastle pool of searching tenants. This has had a huge impact on rental prices that will continue to grow alongside demand, contributing to Newcastle being one of the best property investment areas in the UK.

The biggest problem for Newcastle over the last five years has been its challenges in building capital growth. While postcodes such as NE1 and NE4 have delivered yields over 7%, property values haven’t reflected this rapid growth. However, this bodes well for investors, as property remains affordable to purchase whilst rental values continue to rise. This also makes Newcastle a relatively affordable city to invest in with an average property price of £193,000 according the ONS, one of the lowest on our list of the best places to invest in UK property in 2025.

Home to some major corporate headquarters including Fenwick, Goldsmiths and Greggs, Newcastle is no stranger to housing large-scale, global brands. At the same time, the city is building on a strong education and digital foundation to deliver a standard of career opportunities not seen elsewhere in the region.

Best Rental Yields in Newcastle

NE1 – City Centre – 8.2%

NE4 – Arthurs Hill – 7.4%

NE6 – Heaton – 7.1%

NE8 – Gateshead – 7%

NE2 – Jesmond – 6.6%

Leicester represents one of the more established ‘emerging’ cities on this list, underpinned by one of the strongest economies in the country driven by an incredible manufacturing sector. This East Midlands city is home to some large-scale UK employers including Walkers, Dunelm and Next, making it a hotspot for career opportunities.

This demand for work is further boosted by the Leicester NHS Trust, one of the busiest trusts in the city and an employer for over 15,000 people. For investors seeking long-term, consistent rental demand, these are all key signposts for success.

Thanks to its location within the East Midlands, Leicester has incredible connectivity with major destinations including Birmingham and London. With Birmingham accessible in 48 minutes and London in 92 minutes, it’s ideal for commuters that want a more affordable lifestyle.

These transport links and employment opportunities have fostered an exceptional level of demand that has translated into the local property market. Property values have almost doubled over the past decade from £128,099 in 2014 to £229,483 in 2024, demonstrating that Leicester is ahead of the curve when it comes to property price growth. So, while rental yields aren’t the highest on the list, this capital growth makes for a compelling investment case.

Best Rental Yields in Leicester

LE1 – City Centre – 7.2%

LE3 – Glenfield – 4.8%

LE11 – Loughborough – 4.5%

LE4 – Birstall – 4.5%

LE5 – Goodwood – 4.4%

Nottingham flies under the radar for many ‘best places to invest in UK property 2025’ lists but nevertheless, it has shown tremendous growth over the last five years and is now a key investment hotspot for the East Midlands. So, if you’re searching for the best city to invest in the UK, Nottingham ought to be on your radar.

The city’s main strength is its high capital growth over the last decade and the potential for long-term yield growth in the future. Home to two major universities relatively close to the city-centre, Nottingham continues to see exceptional tenant demand and a rising creative sector that is attracting waves of graduates from both in and around the city.

Nottingham is also much more affordable than many other locations on this list, which has contributed to market-leading yields in city-centre postcodes including NG1 and NG7. Achieving yields of over 8% is rare in any city, yet Nottingham’s city centre properties have the potential to achieve rental yields of 8.5%, which is greater than 2023’s highest yield of 8.1%, demonstrating the impressive trajectory that Nottingham is on. So, for investors considering an investment targeted at students, Nottingham remains one of the best places to buy-to-let in the UK.

Another major contributor to Nottingham’s rising population is Queens Medical Centre, a ‘super-hospital’ that’s also a leading teaching hospital in the UK and home to over 6,000 medical staff, many of whom are looking for residential accommodation within the city.

Best Rental Yields in Nottingham

NG1 – City Centre – 8.5%

NG7 – Lenton – 7%

NG6 – Bulwell – 5.8%

NG8 – Wollaton – 5.2%

NG5 – Woodthorpe – 5%

Bristol is a vibrant, characterful city that has become famous for its independent businesses, creative culture and beautiful harbour location. The city is a thriving hub for businesses and is home to over 20,000 of them at present. What’s more, Bristol is home to the headquarters of larger employers such as Hargreaves Lansdown, Ovo Energy and Airbus, attracting an abundance of higher income earners.

Regeneration in Bristol rivals Birmingham and Manchester, with a number of large-scale projects underway. Most notably is the Bristol Temple Quarter project which is set to redevelop 130 hectares of land over 25 years to build 10,000 new homes, thousands of jobs, and add £1.6 billion per year to the local economy. This forms part of the One City Plan, an ambitious vision for Bristol by 2050 which focuses on creating a ‘fair, healthy, sustainable city’.

Such ambitious growth, exceptional job opportunities and inward investment is impacting the property market – private rents increased by 7.3% in Bristol over the 2023-4 period, which outpaced the South West average of 7%. This, as well as the fact that 20,000 Bristolians are on housing waiting lists, is a testament to the huge tenant demand in Bristol that makes the city one of the best places to invest in 2025.

Best Rental Yields in Bristol

BS34 – Stoke Gifford – 8%

BS16 – Emersons Green – 7%

BS10 – Brentry – 6.5%

BS2 – Kingsdown – 6.2%

BS4 – Knowle – 5.7%

All of our choices for the best places to invest in UK property have been located in England thus far – now it’s time for Scotland to shine. The Glasgow property market has long played second fiddle to that of Edinburgh but now we’re starting to see the city stand apart. As Scotland’s most populated city, Glasgow’s affordability and potential for high rental returns make it an incredibly tempting offer for investment.

With the largest economy in Scotland, Glasgow has a £48 billion GVA thanks to a strong industrial and manufacturing foundation, recently boosted by the £118 million new campus for the local university, earning it the nickname of ‘Scotland’s Silicon Valley’ and further demonstrating its potential as one of the best areas to invest in property.

Glasgow is also recognised as a top destination for culture and associated amenities. As one of the first ‘European Capitals of Culture’ in 1990, it has used this momentum to create a thriving cultural scene that features a broad range of museums and art galleries.

In terms of property prices, Glasgow prices have skyrocketed, sitting at just over £100,000 in 2014 before increasing to £174,000 just 10 years later. This equates to a 74% increase in property values in just a decade, an incredible achievement largely driven by its business sector and regeneration. For investors, this potential could mean a significant price increase in the future.

Best Rental Yields in Glasgow

G21 – Springburn – 10.8%

G52 – Hillington – 8.9%

G31 – Parkhead – 8.2%

G5 – Laurieston – 8.1%

G40 – Dalmarnock – 8%

Predictions for Edinburgh’s growth look extremely positive, with JLL suggesting that by 2028 rental prices will have seen cumulative growth of 22.2% and house prices will have seen cumulative growth of 17%. This forecast comes as no shock considering the trajectory Edinburgh property prices have been on, outpacing growth across Scotland by 6.7% to 4.5% over the 2023-4 period alone.

Edinburgh is already an iconic location thanks to its distinctive architecture, famous landmarks and unmistakable culture. However, the city is experiencing swathes of inward investment to attract tenants and investors alike: Fountainbridge, Granton Waterfront and Wester Hailes are just three of the many regeneration projects taking form in the Scottish capital, bringing new homes, office space, and green spaces to the city.

As for tenant demand, Edinburgh has some of the strongest demand in the UK – the city has seen its population swell by 58,000 over the past decade, creating greater need for suitable accommodation. Furthermore, house prices for first time buyers sit at £262,000, a relatively high cost when compared to both the Scottish and UK national average, which is keeping Edinburgh locals in the rental market for longer. As such, the rental market in Edinburgh certainly favours investors.

Best Rental Yields In Edinburgh

EH8 – Holyrood – 6.9%

EH11 – Stenhouse – 6.7%

EH5 – Granton – 6.4%

EH6 – Leith – 6.3%

EH3 – Stockbridge – 5.8%

Looking to invest in the UK? If you’re deciding where to invest based on rental growth, these are the best places to invest in the UK:

Source: ONS, JLL

Akin to last year, Birmingham, Manchester and Edinburgh maintain their status as some of the best places to invest for current rental yields and predicted growth in the rental sector. Glasgow looks particularly promising considering its existing rental yields already sit above 8%, with rental growth set to strengthen over the coming years.

New to the list are Bristol and Edinburgh, both of which have similarly appeared on our ‘best places to invest for capital growth’ chart, and with good reason: both of these cities are expected to see rental growth of over 21% from 2024 to 2028 according to the latest data from JLL. Although Edinburgh does not command the most astonishing yields at present, coming in at an average of 4.91%, this still manages to beat the national average of 4.75%. However, it is the outlook for the Edinburgh rental market that is particularly deserving of a place in our ‘best places to invest’ roundup, with the Scottish capital being the only location predicted to keep up with Birmingham’s exceptional rental growth of 22.2% over the next 4 years.

If you’re looking to build capital appreciation, these are the best places to invest in the UK for capital growth:

Source: ONS, JLL

Looking at the growth for these specific cities we can truly see the effect that the ‘London Exodus’ has had on regional locations, establishing them as the best places to invest in UK property in 2025 and some of the best buy-to-let areas across the nation.

For the first time, Bristol and Edinburgh have entered the rankings, with each of these cities expected to see at least 17% property price growth between 2024 and 2028. Interestingly, house prices in both of these cities are significantly more expensive than the national average of £284,000 – however, this does not seem to impact the predicted growth of these cities according to JLL. With Edinburgh being the most popular location for those looking to move away from London, and Bristol experiencing huge swathes of regeneration, these two key cities are able to generate great tenant demand despite high prices.

Powerhouse cities Birmingham and Manchester also remain investment hotspots for 2025 and beyond having achieved exceptional growth over the last decade in terms of property prices. Both of these cities are expected to see over 19% property price growth over the next four years, a prediction unmatched by any other cities across the UK. Similarly, Northern powerhouse city Leeds has maintained its status as one of the best places to invest in the UK, with impressive price predictions from JLL making it a strong competitor to Birmingham and Manchester for the most impressive historic and predicted growth.

We’ve unveiled the best places to invest in UK property 2-25, but while some locations are succeeding, others are failing. It is vital that you are aware of these locations that are achieving minimal growth when investing in UK property in order to make the most measured investment decision. These are the current worst places to invest in the buy-to-let, according to the latest information from Mojo Mortgages:

According Mojo Mortgages’ internal data, London remains one of the worst places for buy-to-let yields. As you can see, London’s increasingly expensive property market has led to reduced returns, especially in central London where average rents are only delivering a 3.58% yield. This has been a consistent theme when it comes to London, demonstrating that there has been no significant improvement to rental yields for investors over the past number of years.

West Essex has suffered a similar fate to London, with investors having to fork out almost £600,000 on average to purchase a property in this section of the London commuter belt – however, the average monthly rental charge of £1,799 results in a low yield of just 3.64%. Another segment of the London commuter belt, Bromley, provides comparably low rental yields of 3.69%, demonstrating that even London’s commuter towns and cities are providing poor yields.