UK Investment Hotspots for 2025

You will find many lists of the BEST places to invest, from many different sources and investment companies. The areas differ depending on where each investment company can source properties and developments. What you first need to understand is why YOU are investing and which investment strategy works to achieve the best results for your own personal investment goals. This is explained in more detail in our FREE comprehensive guide to building a profitable property portfolio.

Successful property investment also means understanding local market dynamics, identifying areas with strong economic growth, looking for large regeneration schemes, Government infrastructure projects, and signs of population growth, reasons for people to want to move/live in a particular area.

In a recent report by software company, Cohab, below are the top 10 cities for highest average yields across England & Wales

1. Manchester NORTH WEST 6.35%

2. Merthyr Tydfil WALES 6.28%

3. Portsmouth SOUTH EAST 6.21%

4. Newcastle upon Tyne NORTH EAST 6.02%

5. Salford NORTH WEST 5.91%

6. City of Bristol SOUTH WEST 5.91%

7. Southampton SOUTH EAST 5.91%

8. City of Nottingham EAST MIDLANDS 5.86%

9. Lincoln EAST MIDLANDS 5.80%

10. Blackpool NORTH WEST 5.78%

We have numerous articles about locations and areas in the UK, including Best Place to Live in the UK 2025 & Average Property Prices and Yields Around the UK, which will help you to decide where works for you and your chosen strategy, there are, however, a few stand out places worth noting for various reasons:

• Birmingham

• Manchester

• Newcastle

• Derby

• Leeds

• Sheffield

• Liverpool

• Leicester

• Nottingham

• Bristol

• Glasgow

• Edinburgh

Let's dive into a few of the main cities to understand why these places keep appearing on property investment hotspot lists time and time again.

Birmingham

Birmingham stands out as a good city to invest due to the amount of regeneration and growth it is forecasting. The Big City Plan for example, is described as "the most ambitious, far-reaching development project ever undertaken in the UK" with the aim "to create a world-class city centre by planning for the next 20 years of transformation." This regeneration plan alone is set to:

• Create 50,000+ jobs

• Generate £2.1 billion for the economy each year

• Provide 65,000 square metres of new and improved public spaces (e.g. parks)

• Provide 28 kilometres of walking and cycling routes

• Build 5,000+ homes, and new leisure facilities

• Grow the population of Birmingham by 100,000

Birmingham, according to recent JLL forecasts, is showing price rises of 19.9% by 2028. With average rents in Birmingham rising by 22% over the past five years (Land Registry House Price Index) it is surprising that we are seeing greater tenant demand, rising population with figures hitting 1.23 million by 2038, and with a 41% graduate retention rate, these factors make Birmingham a great place for buy-to-let.

Transport links remain a key factor for Birmingham’s success. Birmingham will soon be a major hub for the HS2 towards London. The HS2 remains one of the most exciting infrastructure developments in this generation, and a key reason to consider investment in Birmingham.

Manchester

Manchester currently provides the best average yields across England & Wales, according to figures reported by the landlord software company, Cohab. The northern city reportedly has average yields of 6.35%, currently the highest in the country, with London quickly catching.

The city boasts the highest tenant satisfaction rate across the major cities, with upto 73% of tenants expressing positive experiences. 62% of households rent in Manchester and the city’s affordability ratio is 7.07, which is nearly half that of London, giving it a strong base for sustainable rental yields. Investors in Manchester benefit from strong occupancy rates and long-term growth prospects.

Manchester has experienced substantial growth in the past 10 years and this trend continues upwards. With several universities, a growing student population of over 100,000 and the second best graduate retention rate, beaten only by London, a plethora of new developments throughout the city, and large-scale regeneration schemes, the city shows no signs of slowing down, economically speaking. The city was voted one of the best cities for business start-ups and employment in general, it is set to increase its population upto 100,000 people by 2036.

There are numerous regeneration projects of differing sizes across Manchester, including:

• Castlefield

• Central Business District

• Chinatown

• Civic Quarter

• Civic Quarter Heat Network

• Culture in the City

• First Street

• Great Ducie Street

• Great Jackson Street

• Kampus

• Mayfield

• Medieval Quarter

• New Cross

• NOMA

• Northern Quarter

• Our Town Hall

• Oxford Road Corridor

• Petersfield

• Piccadilly

• Piccadilly Gardens

• Retail Core

• Sister

• Spinningfields

• St John's

• The Factory

• The Gay Village

• Water Street

Manchester is well known for its history of impressive capital appreciation, and property values have increased by over 30% in the last 5 years. This, coupled with the anticipation of Manchester showing the fastest rate of employment across the UK between 2024 - 2026 it is obvious why it is still seen by many investors as one of the UK's buy to let hotspots. It is the draw of the city that also makes the Greater Manchester region perfect for investors, as many towns, once considered rough estates, are receiving inward investment, and are showing positive signs of regeneration and upward growth. These outlying towns are perfect for investors looking for high-yielding properties, where demand is high and perfect for professional tenants, commuting into Manchester, and housing associations needing affordable solutions to the accommodation shortages, but where prices remain relatively low, compared to the city centre. Places of note are Salford, Bolton, Bury, Oldham, Rochdale, Stockport, Ashton-under-Lyne, Hyde, Audenshaw, Droylsden, Trafford, and Wigan.

Property prices in Manchester are expected to rise by 19.3% over the next 4 years, as shown in JLL’s forecasts. Manchester is a great place to consider investment, showing one of the largest regional economies outside of London, with projected rental growth of 19.3% from 2024 - 2028. Manchester was top in the Economist’s Liveability Index 2022, crowned ‘the UK’s most liveable city’.

Newcastle

Newcastle is a great place to invest due to affordability, lower property prices compared to other cities in the UK, a strong student population, and a home to numerous large national brands. Newcastle is the cultural hub of the North East, and with beautiful architecture sitting amongst modern regeneration schemes, it is understandable why some of the Newcastle postcodes are generating yields over 7%. Property prices have risen 2.1% in the last year across Newcastle.

Another reoccurring reason why Newcastle is a buy to let hotspot is the high retention rate of its graduates, adding to its growing population, and another city where start-ups thrive, attracting young professionals looking for employment. According to figures from the ONS, Newcastle has an average property price of £193,000, which is low compared to Manchester and Birmingham, but this with its high demand across the rental sector provides a great base for investors to achieve great yields, and the potential for solid capital growth. Newcastle, like the other cities above, has numerous large regeneration projects underway, including a £170m development project featuring a hotel, housing, bars and restaurants which was unveiled at MIPIM.

Other areas

In the figures released by Cohab for top-performing areas for rental yields, second and third places went to Merthyr Tydfil, in Wales, with 6.28%, and Portsmouth, 6.21%, respectively. The North of England is still offering investors great returns, with the Greater Manchester city of Salford also giving landlords high yields of 5.91%.

Wales, aside from Merthyr Tydfil, also shows strong signs of increasing yields, with Newport at 4.90% and Torfaen at 5.28%. Overall, these figures show positivity across the investment sector, and offers a reminder to investors that longevity in the property sector is still a proven, successful investment asset class.

To learn more about other areas worth considering for investment we would advise speaking to Landmarka, our trusted third party sourcing agent.