Investing In The UK – Property Hotspots Revealed
The UK property market offers lucrative investment opportunities for buyers looking to generate rental income or benefit from capital appreciation. While London has traditionally dominated the prime property sector, other regions are now emerging as up-and-coming hotspots that deliver high yields and excellent prospects for growth. This article explores the top locations outside of the capital where savvy investors can secure strong returns.
Manchester and the North West
Over the past decade, Manchester has firmly established itself as one of the most vibrant and fastest-growing cities in the UK. Nicknamed the original modern city, Manchester combines a rich industrial heritage with cutting-edge redevelopment and infrastructure projects.
Major investments in transport links, culture, and regeneration have transformed Manchester into a cosmopolitan hub with a thriving economy. As a result, property prices in the city centre have risen by an average of 6% year-on-year over the past five years. However, Manchester still offers superb value compared to London. According to property website Rightmove, the average asking price for a home in Manchester is just under £200,000 – less than half the price of the average London property.
Areas like Ancoats, Castlefield, Northern Quarter and Spinningfields are gentrifying at speed and deliver high rental yields due to their popularity with young professionals. New build apartments achieve rents of up to £1,100 pcm for a two-bedroom property. Investors can achieve gross yields of 5-6% on apartments in the city centre.
The surrounding towns of Salford, Stockport and Bolton are also benefiting from the ripple effect, with major regeneration schemes improving transport and infrastructure. Properties in these commuter towns deliver yields upwards of 7%.
Birmingham and the West Midlands
As the UK’s second-largest city, Birmingham is a major economic and commercial centre. The regeneration of the city centre has led to massive investment in infrastructure and facilities. Sunderland project 76, which stretches along the Aston Canal leisure route, will provide 2,000 new homes and a total investment of £482 million by 2020.
Birmingham’s property market reflects this continued growth and development. City centre apartments offer strong yields, with rental demand outpacing supply. Properties near Birmingham City University are well to students during term time. Two-bedroom flats typically achieve yields of over 6%.
Areas on the outskirts of Birmingham such as Sutton Coldfield and Solihull are popular with families and commuters. Investors can pick up three and four-bedroom suburban homes delivering yields of 4-5%.
Wolverhampton, Coventry and Stoke-on-Trent offer excellent value for money. Terraced properties in these locations can be picked up from £120,000 and let for upwards of £700 pcm.
Leeds and Yorkshire
Leeds is Yorkshire’s economic powerhouse and the UK’s fastest-growing city outside of London. Huge investment has transformed Leeds over the past 20 years, with the population increasing by over 140,000 between 2001 and 2016.
Young professionals are flocking to Leeds for its buzzing nightlife, cultural scene and employment opportunities. Areas like the city centre, Headingley and Chapel Allerton are popular with tenants, pushing up rents. Investors can achieve yields of over 5% on newly built flats near the city centre. Converted mill apartments or period properties deliver even higher returns.
Leeds’ housing market also benefits from excellent transport links. The average commute time is just 39 minutes, encouraging professionals to live in nearby towns like Huddersfield, Harrogate and Wakefield and commute into the city. These commuter towns offer great value for investors, with yields upwards of 6% achievable.
Liverpool and Merseyside
Liverpool presents a compelling case for investment due to its strong economic growth, relative affordability and fantastic re-development schemes. Liverpool city centre has been transformed in recent years and the regeneration continues at pace.
The Baltic Triangle area is thriving, with funky warehouses turned into bars, restaurants and creative offices. Rental demand is sky-high. Investors can achieve yields of 6-8% on properties in this popular area.
Liverpool’s large student population ensures strong tenant demand across the city centre. Parents are willing to pay higher rents to secure good quality accommodation for their children near universities. Two-bedroom flats near LJMU and the University of Liverpool let well and deliver yields upwards of 7%.
Areas just outside the city centre like Kensington, Toxteth and Aigburth offer excellent value. Period terraces cost from £150,000 and let for over £750 pcm.
The Wirral is ideal for family housing, with excellent transport links into Liverpool. Investors can pick up a three-bedroom semi-detached house for £180,000 and achieve yields over 5%.
With its world-leading universities and ties to London, Cambridgeshire has flourished in recent years. Cambridge itself offers little scope for investment, with prohibitive prices. But surrounding towns present exciting opportunities.
Fast rail connections allow commuters to live in Cambridgeshire towns and work in London. As a result, towns like Ely, March, Wisbech, St Neots and Huntingdon are thriving.
Improved infrastructure is also drawing companies to locate offices in Cambridgeshire. House prices in these commuter belt towns still lag behind the ripping pace of development. Investors can secure strong yields on properties let to Cambridge’s huge working population. A £220,000 three-bedroom house in March or Ely will let for around £1,000 PCM – a gross yield of more than 5.5%.
South Cambridgeshire has seen massive job growth in recent years thanks to the booming biotech sector. The new Cambridge Biomedical Campus at Addenbrooke’s Hospital employs over 15,000 people. Nearby towns like Haverhill, Saffron Walden, and Newmarket are popular with commuters working at the campus. Two and three-bedroom family homes deliver yields upwards of 5%.
Milton Keynes ranks as one of the UK’s top-performing economies. Over the next decade, some 27,000 new homes will be built in Milton Keynes to meet rising demand. The population is projected to grow by over 50,000 by 2026, fuelled by skilled job creation.
These exceptional growth metrics make Milton Keynes a standout investment location. Both property prices and rents are rising fast, delivering stellar returns for landlords.
Areas like Central Milton Keynes offer well to young professionals working locally in skilled jobs. Investors can achieve gross yields upward of 6% on modern flats close to the centre.
Milton Keynes has a large student population who require quality rental accommodation. Purpose-built student complexes near MK Dons football stadium benefit from strong demand. Studios and en-suite rooms deliver yields of 7-8% thanks to parental guarantors.
With excellent road and rail links, Milton Keynes attracts City commuters. Four and five-bedroom family homes in suburbs like Stony Stratford and Woburn Sands are easy for tenants who work in London. Yields range from 4-6% depending on property size.
Dynamic Bristol has cemented its status as the UK’s leading tech hub outside London. The city contributes £14 billion to the UK economy each year across its strengths in aerospace, creative and environmental industries.
Bristol is regularly voted one of the best places to live in the UK due to its cool, cultured vibe and fantastic quality of life. This attracts droves of young professionals who fuel the demand for rental property across the city.
Prime spots include harbourside areas like Millennium Square, which delivers gross yields upward of 6% due to popularity with young tenants working in creative industries. Two-bedroom flats cost from £250,000 and let for over £1300 pcm.
Areas outside the centre like Fishponds, Stoke Bishop and Clifton offer family housing at more affordable prices. Investors can pick up period properties costing £350-400,000 which let for £1500-£1800 pcm – a yield of approx. 5%.
Excellent transport links with London encourage commuters to live in Bristol and travel into the capital just 1 hour 20 mins away. This provides a pool of reliable tenants in need of smart city flats and spacious family homes.
Edinburgh and East Scotland
Perennial favourite Edinburgh continues to attract buyer interest due to its status as Scotland’s most vibrant and cosmopolitan city. Major financial firms and tech companies have bases in Edinburgh, drawing skilled professionals who rent in the city.
Areas like Canonmills and Stockbridge are highly popular with young tenants working in banking and financial services. One and two-bedroom flats in Georgian townhouses can deliver yields upward of 6%. Some landlords split larger properties into multiple studio flats catering to young single tenants.
Edinburgh’s student population guarantees demand across the city centre. Areas around Napier University are good for undergraduates and visiting students. Gross yields on studio flats near campuses can exceed 8%.
The coastal town of Dunbar is emerging as a hotspot for commuters who work in Edinburgh but seek a quieter lifestyle. A £180,000 three-bedroom property in Dunbar will let for around £800 pcm – delivering a yield of 5.3%.
Stirling, Glenrothes, Kirkcaldy and Perth also offer value as Edinburgh commuter towns. Improved rail links allow tenants to live in these more affordable areas and commute to high-paying jobs in the capital. Investors can secure yields upwards of 6% on flats and family homes.
Cardiff and South Wales
With a population of over 360,000, Cardiff is Wales’ only city and the country’s economic powerhouse. Huge investment has transformed Cardiff over the past 20 years since becoming the capital city.
Cardiff attracts students, skilled workers and professionals across sectors like media, tech and finance. Demand is rising fastest for rental accommodation in the city centre and Cardiff Bay.
Areas like Pontcanna and Canton are sought after by young professionals working in the city. Terraced properties cost from £220,000 and are let for over £900 pcm – delivering yields upwards of 5%.
Purpose-built student complexes around Cardiff University are easy for undergraduates. Investors can achieve gross yields of 7% and upward from studio and en-suite developments.
Cardiff’s excellent transport links allow commuters to live affordably in surrounding towns. Swansea, Newport, Barry and Bridgend all provide a pool of tenants willing to travel to Cardiff for work. Investors can secure higher yields on family homes in these commuter belt locations.
Belfast and Northern Ireland
Belfast has undergone major regeneration over the past two decades following the Good Friday Agreement. The city’s economy has diversified with growth in tourism, creative industries and financial services. Titanic Belfast became one of Northern Ireland’s most popular attractions.
Major employers include Citigroup, Allstate, Bombardier Aerospace and B/E Aerospace, attracting professionals in need of rental accommodation. Areas like the fashionable Cathedral Quarter return yields upwards of 6% on stylish flats. Queens University guarantees demand from 20,000 students for properties within walking distance.
Belfast’s relative affordability versus other UK cities also makes it appealing. According to Rightmove, the average asking price is just £155,000 compared to £473,000 in London. Investors can pick up flats close to the city centre for £120,000 and secure yields over 6% due to high tenant demand.
Areas like Lisburn, Carrickfergus and Bangor offer excellent value for commuters who work in Belfast but seek more space. £180,000 will buy a four-bedroom semi-detached house yielding over 5% due to reliable demand.
Savvy investors know that the best property hotspots are not confined solely to London. Dynamic regional cities across Britain are experiencing growth and regeneration which creates the ideal conditions for buy-to-let.
Focusing on locations which offer strong employment opportunities, infrastructure investment and a desirable lifestyle is key. Towns benefiting from knock-on effects like commuter demand allow investors to secure higher yields on family homes.
Researching areas with expanding populations of target tenants – like students, young professionals and families – is a smart strategy. Investors prepared to look beyond prime central London can secure excellent returns. The UK’s regional property markets offer huge potential for buy-to-let investors.