- The best places to invest in property in the UK are all transforming and growing.
- The average rental yield is between 4.51% and 6.22%, depending on the location.
- Local economic growth, infrastructure, amenities, house prices and rental demand all play a role in making a location desirable for investors.
- A mortgage broker can help you to secure the best rates and maximise returns.
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What makes a location a good place to invest in property?
Investing in property is not just about finding a house; it’s also about “location, location, location.”
Choosing the right location is the key to unlocking profitable opportunities and ensuring a robust return on your investment.
There are several crucial factors that should guide your decision:
- Economic growth and job opportunities: A thriving local economy with diverse job opportunities attracts more residents, leading to increased demand for rental properties.
- Infrastructure development and connectivity: Strong infrastructure, including transport links and amenities, enhances an area’s appeal.
- Rental demand and potential for capital growth: Locations with a high rental demand often offer better yields and long-term capital growth potential.
- Local amenities, schools, and recreational spaces: Access to high-quality amenities, schools, and recreational spaces add value to a location. Families, in particular, seek areas with good schools and nearby parks.
However, it’s important to note legal changes, such as the Renters Reform Bill, may impact property investors in the future.
When considering property investment, it is advisable to stay informed about the potential implications of any new legislation.
Where is the best place to invest in property in the UK?
The potential for profitable investments in the UK property market isn’t limited to a few areas. From vibrant cityscapes to up-and-coming regional gems, many places offer enticing property investment opportunities.
While the best places to invest in property may seem unconventional, they’re chosen based on research and the return on investment (ROI). Lower property costs in these locations also facilitate quicker returns.
Based on analysis from property investment specialist Joseph Mews, here are the best places to invest in property in the UK:
1. Birmingham
Major city in the West Midlands
Birmingham’s impressive transformation into a business and cultural hub has driven demand for property.
The city’s ongoing infrastructure developments have positioned it as a hotspot for property investment.
Birmingham’s Eastside and Southside are undergoing massive regeneration, as are areas such as Digbeth, which is turning into a trendy district.
- Average property price: £228,000
- Average monthly rent: £990
- Average rental yield: 5.21%
- Growth prediction (2024-2028): 19.9%
2. Derby
City on the banks of the River Derwent
Bridging the North and the South, this East Midlands hotspot is currently enjoying a major regeneration project, with impressive house price growth anticipated.
The city has a youthful population (48% is under 35), with as many as 17 universities within an hour’s travel. Graduates like to stick around, too, with Derby boasting the 7th highest graduate wages in the UK.
Big employers in the city include Toyota and Rolls Royce. As such there’s a huge demand for rental property in Derby.
- Average property price: £199,000
- Average monthly rent: £748
- Average rental yield: 4.51%
- Growth prediction (2024-2028): 22.8%
3. Leeds
Major city in the county of Yorkshire
As a diverse economic hub, Leeds attracts a steady influx of residents and businesses.
Developments, including the South Bank regeneration project, are transforming the Waterfront area, highlighting Leeds’ commitment to modernisation and urban living.
This ‘Northern Powerhouse’ has a thriving economy with strong rental demand from working professionals and students alike.
- Average property price: £234,000
- Average monthly rent: £1,095
- Average rental yield: 5.61%
- Growth prediction (2024-2028): 18.8%
4. Bradford
City in West Yorkshire
Just down the road from Leeds, Bradford is gaining attention from property investors too, thanks to its ongoing regeneration efforts, such as transforming areas like City Park and the Broadway shopping district.
It has also been named the 2025 City of Culture – an accolade that’s expected to boost the economy by a cool £700 million.
Bradford’s affordable property prices, combined with these improvements, make it one of the best places to invest in property.
- Average property price: £175,000
- Average monthly rent: £679
- Average rental yield: 4.65%
- Growth prediction (2024-2028): 28.2%
5. Manchester
Major city in the northwest
Manchester has experienced substantial growth in recent years. The city’s vibrant cultural scene and booming business environment attract residents and investors alike.
Areas like Ancoats and New Islington are undergoing urban regeneration, converting industrial spaces into modern residential and commercial units.
The city is home to 100,000 students and boasts a high graduate retention rate, keeping the demand for affordable rental accommodation strong.
- Average property price: £234,000
- Average monthly rent: £1,214
- Average rental yield: 6.22%
- Growth prediction (2024-2028): 29.3%
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6. Sheffield
City in South Yorkshire
Sheffield is another northern hub that’s enjoying a lot of regeneration and investment – the city’s retail sector alone has attracted £480 million in investment.
As such the city centre has become a rental hot spot with rental yields reaching 8%.
With two universities, Sheffield also has a healthy student population that now stands at over an estimated 63,000.
Rental demand should also be buoyed during the next 10 years, through the Advanced Manufacturing Park which is expected to create 70,000 jobs.
- Average property price: £214,000
- Average monthly rent: £839
- Average rental yield: 4.7%
- Growth prediction (2024-2028): 28.2%
7. Liverpool
Maritime city in northwest
Liverpool’s rich cultural heritage and ongoing economic revival make it an attractive prospect for property investors.
Its affordability, coupled with developments in areas such as the Baltic Triangle and Knowledge Quarter, enhances Liverpool’s appeal, creating modern spaces for residents and businesses.
Liverpool is a popular spot for start-up businesses and is home to 70,000 students.
- Average property price: £175,000
- Average monthly rent: £776
- Average rental yield: 5.32%
- Growth prediction (2024-2028): 28.8%
8. Newcastle
Cathedral city in Tyne and Wear
Newcastle’s affordability and lively cultural scene make it an attractive location for property investors.
Developments like the Helix project contribute to Newcastle’s modernisation, offering new opportunities for those looking for property to invest in.
It’s also a popular hub for start-up businesses, making it an attractive destination for young professionals.
- Average property price: £193,000
- Average monthly rent: £986
- Average rental yield: 6.13%
- Growth prediction (2024-2028): 25.2%
9. Leicester
City in the East Midlands
Leicester’s affordability and strong job market make it another attractive choice for investors.
Developments like the Leicester Waterside project are contributing to the city’s transformation, offering modern living spaces and commercial opportunities.
- Average property price: £229,000
- Average monthly rent: £915
- Average rental yield: 4.79%
- Growth prediction (2024-2028): 22.8%
10. Nottingham
City in the central Midlands
Nottingham’s diverse economic landscape, affordability and steady job market mean a positive outlook for investors.
Developments like the Nottingham Southside regeneration project aim to transform the area by creating modern living spaces and commercial opportunities.
- Average property price: £192,000
- Average monthly rent: £915
- Average rental yield: 5.71%
- Growth prediction (2024-2028): 22.8%
Where are the worst places to invest in property?
While many locations offer lucrative opportunities for investing in property, some places may not be financially beneficial.
Here are five areas Track Capital suggests you approach with caution:
- Southend-on-Sea: Limited job market and slow economic growth.
- Blackpool: High crime rates and limited economic diversification.
- Wolverhampton: Challenges in economic development and limited diversification.
- Sunderland: Economic struggles impacting property market performance.
- Stoke-on-Trent: Slow population growth and limited economic opportunities.
Seek expert financial advice
Navigating the diverse landscape of property investment in the UK requires careful consideration.
The importance of choosing the right location for optimal returns and factors such as economic growth, infrastructure, and rental demand play crucial roles when investing in property.
You can embark on a successful journey by focusing on the best places to invest in property in the UK and understanding the key factors that influence investment decisions.
As mortgage rates have climbed significantly over the past two years, a mortgage broker can offer guidance and help you secure the best rates.
Let Unbiased match you with an expert mortgage broker who will help you find the best property investment options with the best returns.
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.
