What Are the Best Places in the UK to Invest in Property?

UK property is considered one of the most attractive ventures when it comes to investing your money. With a lot of potential on offer from investment opportunities in UK cities, such as strong rental returns and capital gain, investing in the UK market is a great way to build a lucrative portfolio and grow your income over time. As with any investment, however, there are certain things you need to know before you make an investment purchase, and knowing about property investment hotspots is one of them.

If you’re interested in investing in the UK, it’s important to find out about the best places to buy property before committing to a buy to let purchase. In this detailed guide, we’ll discuss the different benefits of each property investment hotspot, helping you select the best places to invest in property in the UK. Here, you’ll find information on the UK cities with the most affordable property prices, the highest rental yields, and the strongest capital growth potential. We also include an FAQ’s section which covers some commonly asked questions about investing in the UK and the UK property market overall, including a timeline on how the UK property market has changed from 2018 to 2020 and information on the effect that Brexit and Covid-19 will have on UK property investment in 2020, 2021, and beyond. If this sounds useful to you, scroll down to read our guide to the best areas for buy to let.

Contents

Where to Invest in Property for Capital Growth?

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The Best Place to Invest in the UK for Rental Yields

New Manchester Apartments

Luxury M3 Investment

All-New Manchester Development

Manchester Prices from £121,950

5% Projected NET Rental Return

City Centre Location

New Launch

Merchant's Wharf

Salford Waterfront Apartments

Manchester Prices from £149,950

Up to 6.5% Projected Rental Return

55% Below Market Value

Liverpool Eco Apartments

ELEMENT - The Quarter

New Launch of Eco Development

Liverpool Prices from £92,950

8% NET Rental Return

300m away from new £1b Royal Hospital

Where Is the Best Place to Buy Property in the UK for Affordability?

How Has the UK Property Market Changed From 2018 to 2020?  

So we know that Northern cities offer some of the best opportunities for capital growth, rental yields and low-prices, but how has the market changed over recent years? Here’s a timeline with information on key events throughout the UK property market from January 2018 to October 2020.

 

Q4 2018

Liverpool, Leeds, and Manchester were named ‘ones to watch’ in the UK property market. (Buy Association) Savills predict that North West property prices will rise by 18.1% by 2022, Other regions expect attractive growth, with an increase of 17.6% predicted for the North East and Yorkshire. (Buy Association)

Q1 2019

Figures from Nationwide revealed that property prices in the UK had dropped by 0.1% in February 2019. Experts remained hopeful that the housing market would improve due to the fact that unemployment rates were falling and wage growth was increasing. (Mirror)

Q3 2019

JLL reported a rise in demand for properties in Manchester due to a 117% growth in the number of people moving to the city in July 2019 compared to the previous year. (Buy Association). Property sales in the South of England decreased by 13% since 2015. Sales in Northern England had grown by 6%. (Independent)

Q4 2019

Liverpool named as the best location for buy to let yields with six postcodes making the top 25. (Buy Association) Savills predict property prices in the North West will grow six times faster than that of London by 2024. (Property Industry Eye)

Q1 2020

After Boris Johnson’s win at the general election on 12th December, property experts had predicted a boost in the UK housing market thanks to increased certainty. (Your Mortgage) The North of England remains the best area for buy to let rental yields due to demand outpacing supply (Landlord News)

Q2 2020

property experts predict that UK house prices are set to fall due to economic uncertainty caused by covid-19 (City A.M.) However, at end of Q2, continuous demand for property investment during lockdown leads to UK property sales recovering to pre-lockdown levels. (The Guardian)

 

Q3 2020

Chancellor Rishi Sunak announces a ‘stamp duty holiday’, allowing buy to let investors and those buying a second home to make some huge savings on their stamp duty tax costs. (BBC). Savills update their property price predictions. The UK is predicted to see 20.4% growth, while the North West region is set to grow by 27.3%. (Savills)

Q4 2020

Statistics on the rental market in the UK show that the average rent in the UK has reportedly risen by 2.1% between September 2019 and September 2020. (Mortgage Introducer)

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Frequently Asked Questions About Property Investment UK

Throughout 2020, the UK property market has experienced a lot of uncertainty, leaving many people questioning “is now a good time to invest?“. For property investment, UK areas are an increasingly popular option, and the property sector is widely known as a stable investment option when compared to more high-risk ventures like the stock market and investment trusts. The best places to invest in the UK offer attractive qualities such as high rental yields, growing demand for rental accommodation, and huge property price growth. In 2020 especially, there has been a noticeable surge in levels of demand for rental properties, which has caused the average UK rental cost to rise by 2.1% in the year to September 2020. Property prices, like rental prices, are also expected to grow in the coming years, leaving investors with some attractive potential capital growth. In updated property price predictions from Savills, UK house prices are set to see an overall increase of 20.4% by 2024, with even higher regional growth of 27.3% expected for the North West. Overall, investing in property in the UK – particularly buying property up North, remains a profitable option for buy to let investors to consider.

Knowing where to invest is an essential factor in securing a profitable property investment, but there are also some other things you should think about. If you want to know how to make your property investment venture as lucrative as possible, you should keep the following tips in mind.

  • When embarking on a UK investment, be sure to research your options for investing in property. While buy to let is a popular strategy, and the one we reference most throughout this guide to the best places to invest in property, there’s also buy to sell. Buy to sell works a little differently to buy to let due to the fact buy to sell investors don’t rent their property out to tenants for a profit. With a buy to sell investment, the investor will purchase a property and then benefit from the money they make from it’s sale. This means that capital growth and added property value are crucial for this type of investor. While buy to let strategies are overall more profitable as the investor benefits from both rental income as well as income from the sale of the property, many people prefer buy to sell strategies, so make sure you research the different property investment opportunities out there to find one that you feel will be the most lucrative for you.
  • Make sure you do further research on the best places to invest in the UK. This guide to the best areas to invest in property is definitely a good place to start, but once you know the basics, you should follow up with some research of your own. That means comparing investment opportunities in different cities, looking at house price growth statistics for different areas, and finding out about the population of each city to get a better idea of rental demand. By researching the best areas to invest, you can ensure that your investment in UK property is a lucrative one.
  • Investing in off-plan properties is an important tip for investors who want to find the most lucrative property investment opportunities. One of the best tips for investors is to find properties that have below-market value prices, and since off-plan properties tend to be offered at discounted rates, they make a great choice. By paying lower amounts for your investment property, you’re able to experience heightened capital growth as well as a stronger rental yield. Off-plan properties are also often offered with incentive deals such as assured rental returns.

The Covid-19 pandemic of 2020 has had an impact on the UK property market, although not as negative as many had initially predicted. Following the nationwide UK lockdown in March, Zoopla predicted that Covid-19 would ‘paralyse’ the UK property market, with property price drops well into summer. By September 2020, property prices had reportedly reached a record high, having risen at their fastest rate since 2016. Despite some negative property market performance during the Spring, UK property investment remained strong, with many investors looking to take advantage of enticing deals such as discounted property prices and the stamp duty holiday which was announced in July. So far, it looks like the UK market has stayed resilient in the face of uncertainty brought by the Covid-19 pandemic, with 2020 and 2021 remaining a great time to invest money in UK property.

While we know that property prices in a number of UK cities are currently performing highly, with some fantastic rental yields and property growth areas in the UK, the issue of property prices after Brexit is one that still leaves many investors feeling uncertain. If you’re wondering ‘where is the best place to invest in property following Brexit?’ and whether the best places to invest in property in the UK for 2019 will remain promising after our exit from the EU, the following information should help.

After leaving the EU officially on the 31st of January, the UK was in a transition period for the majority of 2020. On the 24th December, a Brexit deal had finally been agreed on with the EU, which was brought a new level of certainty to the UK property market. The main reason that Brexit has affected the UK property market over recent years has been due to uncertainty brought on by the vote. Following Boris Johnson’s election victory in December 2019, however, things have massively improved in what’s been named the ‘Boris Bounce’. Because Johnson was elected with such a high majority, the UK regained a lot of confidence in both the property market and economy. Immediately following the general election result, the GBP reached the highest rate it had been at since May 2018, investment sectors saw a growth in share prices, and property prices jumped by 1.8% in one month.

Due to this boost in market confidence, experts are predicting that both property prices and rental values are set to see a rise over the coming years, even with some remaining uncertainty around the outcome of Brexit. Specifically, the best places to buy in UK areas are expected to continue to be those in the North West, with JLL predicting a 3% growth in rental costs for Liverpool and Manchester.

The best areas for rental properties in the UK are those based in the North West region, due to cities like Liverpool offering the highest yields in the country. But where are the best places to buy an investment property when it comes to future rental returns? A recent report from JLL reveals that the highest rental price growth is expected within one of the most prominent property hotspots in the UK – Manchester. Manchester is expected to experience a five year growth of 16.5% in the cost of rent, which will inevitably lead to stronger rental returns. Liverpool is also set to see rental prices grow over the next five years, with an increase of 14.8%. This shows that if rental returns are your main motive for investing in UK buy to let, buying property up North remains a fantastic option over the coming years.

By analysing the most popular buy to let cities, it’s evident that there’s a clear divide between the North and the South when it comes to property investment. Five of the eight cities in this list of the best place to invest in property in the UK are located in the North. The remaining cities are based in the Midlands and Scotland, with no Southern cities offering signs of a high-performing property market in terms of yields, affordability and growth. So why is it that the best areas for buy to let tend to be up North?

Let’s start by looking at property prices in three of the top cities in the South. In Brighton, average property prices according to Zoopla stand at £478,106. In Bristol, the average is a little lower at £338,111, and in London, the average property price is a whopping £906,907. Because of these high purchase prices, it’s difficult to generate high rental yields.

In Totally Money’s buy to let guide, London’s WC1X postcode is home to the number one worst rental yield at 2.28%. In this postcode, average rental costs for a one-bedroom flat are around £1,880 per month according to Zoopla data. Pair this with the average purchase price of £634,776 for the same property, and you end up with a yield of around 3.55%. While this isn’t as low a figure as some, it begs the question as to why you would spend so much on a London investment when you could spend a lower amount and benefit from higher yields in the North.

Capital growth is also typically low in the South, with London property values having grown by only 6.45% over the last five years compared to 15.76% in Manchester. Savills also predicts that house prices in London will have increased by just 12.7% by 2024. In the South East and South West, predictions for capital growth are a little stronger, with an increase of up to 17.3% expected. If you’re adamant on not buying property up North for your investment, these regions are probably the best places to buy property in the South when it comes to capital gains.

Should I Invest in Property in the UK? Is UK Property Still a Good Investment?

Throughout 2020, the UK property market has experienced a lot of uncertainty, leaving many people questioning “is now a good time to invest?“. For property investment, UK areas are an increasingly popular option, and the property sector is widely known as a stable investment option when compared to more high-risk ventures like the stock market and investment trusts. The best places to invest in the UK offer attractive qualities such as high rental yields, growing demand for rental accommodation, and huge property price growth. In 2020 especially, there has been a noticeable surge in levels of demand for rental properties, which has caused the average UK rental cost to rise by 2.1% in the year to September 2020. Property prices, like rental prices, are also expected to grow in the coming years, leaving investors with some attractive potential capital growth. In updated property price predictions from Savills, UK house prices are set to see an overall increase of 20.4% by 2024, with even higher regional growth of 27.3% expected for the North West. Overall, investing in property in the UK – particularly buying property up North, remains a profitable option for buy to let investors to consider.

How Can I Make My Investment in the UK as Profitable as Possible?

Knowing where to invest is an essential factor in securing a profitable property investment, but there are also some other things you should think about. If you want to know how to make your property investment venture as lucrative as possible, you should keep the following tips in mind.

  • When embarking on a UK investment, be sure to research your options for investing in property. While buy to let is a popular strategy, and the one we reference most throughout this guide to the best places to invest in property, there’s also buy to sell. Buy to sell works a little differently to buy to let due to the fact buy to sell investors don’t rent their property out to tenants for a profit. With a buy to sell investment, the investor will purchase a property and then benefit from the money they make from it’s sale. This means that capital growth and added property value are crucial for this type of investor. While buy to let strategies are overall more profitable as the investor benefits from both rental income as well as income from the sale of the property, many people prefer buy to sell strategies, so make sure you research the different property investment opportunities out there to find one that you feel will be the most lucrative for you.
  • Make sure you do further research on the best places to invest in the UK. This guide to the best areas to invest in property is definitely a good place to start, but once you know the basics, you should follow up with some research of your own. That means comparing investment opportunities in different cities, looking at house price growth statistics for different areas, and finding out about the population of each city to get a better idea of rental demand. By researching the best areas to invest, you can ensure that your investment in UK property is a lucrative one.
  • Investing in off-plan properties is an important tip for investors who want to find the most lucrative property investment opportunities. One of the best tips for investors is to find properties that have below-market value prices, and since off-plan properties tend to be offered at discounted rates, they make a great choice. By paying lower amounts for your investment property, you’re able to experience heightened capital growth as well as a stronger rental yield. Off-plan properties are also often offered with incentive deals such as assured rental returns.

What Effect Has Covid-19 Had on the UK Property Market?

The Covid-19 pandemic of 2020 has had an impact on the UK property market, although not as negative as many had initially predicted. Following the nationwide UK lockdown in March, Zoopla predicted that Covid-19 would ‘paralyse’ the UK property market, with property price drops well into summer. By September 2020, property prices had reportedly reached a record high, having risen at their fastest rate since 2016. Despite some negative property market performance during the Spring, UK property investment remained strong, with many investors looking to take advantage of enticing deals such as discounted property prices and the stamp duty holiday which was announced in July. So far, it looks like the UK market has stayed resilient in the face of uncertainty brought by the Covid-19 pandemic, with 2020 and 2021 remaining a great time to invest money in UK property.

How Is Brexit Expected to Affect the UK Property Market?

While we know that property prices in a number of UK cities are currently performing highly, with some fantastic rental yields and property growth areas in the UK, the issue of property prices after Brexit is one that still leaves many investors feeling uncertain. If you’re wondering ‘where is the best place to invest in property following Brexit?’ and whether the best places to invest in property in the UK for 2019 will remain promising after our exit from the EU, the following information should help.

After leaving the EU officially on the 31st of January, the UK was in a transition period for the majority of 2020. On the 24th December, a Brexit deal had finally been agreed on with the EU, which was brought a new level of certainty to the UK property market. The main reason that Brexit has affected the UK property market over recent years has been due to uncertainty brought on by the vote. Following Boris Johnson’s election victory in December 2019, however, things have massively improved in what’s been named the ‘Boris Bounce’. Because Johnson was elected with such a high majority, the UK regained a lot of confidence in both the property market and economy. Immediately following the general election result, the GBP reached the highest rate it had been at since May 2018, investment sectors saw a growth in share prices, and property prices jumped by 1.8% in one month.

Due to this boost in market confidence, experts are predicting that both property prices and rental values are set to see a rise over the coming years, even with some remaining uncertainty around the outcome of Brexit. Specifically, the best places to buy in UK areas are expected to continue to be those in the North West, with JLL predicting a 3% growth in rental costs for Liverpool and Manchester.

Where in the UK Are Rental Returns Set to Rise?

The best areas for rental properties in the UK are those based in the North West region, due to cities like Liverpool offering the highest yields in the country. But where are the best places to buy an investment property when it comes to future rental returns? A recent report from JLL reveals that the highest rental price growth is expected within one of the most prominent property hotspots in the UK – Manchester. Manchester is expected to experience a five year growth of 16.5% in the cost of rent, which will inevitably lead to stronger rental returns. Liverpool is also set to see rental prices grow over the next five years, with an increase of 14.8%. This shows that if rental returns are your main motive for investing in UK buy to let, buying property up North remains a fantastic option over the coming years.

North vs South: Why Is Buying Property Up North More Lucrative?

By analysing the most popular buy to let cities, it’s evident that there’s a clear divide between the North and the South when it comes to property investment. Five of the eight cities in this list of the best place to invest in property in the UK are located in the North. The remaining cities are based in the Midlands and Scotland, with no Southern cities offering signs of a high-performing property market in terms of yields, affordability and growth. So why is it that the best areas for buy to let tend to be up North?

Let’s start by looking at property prices in three of the top cities in the South. In Brighton, average property prices according to Zoopla stand at £478,106. In Bristol, the average is a little lower at £338,111, and in London, the average property price is a whopping £906,907. Because of these high purchase prices, it’s difficult to generate high rental yields.

In Totally Money’s buy to let guide, London’s WC1X postcode is home to the number one worst rental yield at 2.28%. In this postcode, average rental costs for a one-bedroom flat are around £1,880 per month according to Zoopla data. Pair this with the average purchase price of £634,776 for the same property, and you end up with a yield of around 3.55%. While this isn’t as low a figure as some, it begs the question as to why you would spend so much on a London investment when you could spend a lower amount and benefit from higher yields in the North.

Capital growth is also typically low in the South, with London property values having grown by only 6.45% over the last five years compared to 15.76% in Manchester. Savills also predicts that house prices in London will have increased by just 12.7% by 2024. In the South East and South West, predictions for capital growth are a little stronger, with an increase of up to 17.3% expected. If you’re adamant on not buying property up North for your investment, these regions are probably the best places to buy property in the South when it comes to capital gains.

So, What Is the Best City To Invest in Property?

While this guide has offered an in-depth analysis of the best places to invest in property, UK investors should take time to think about the locations that best meet their specific goals. Think about what it is that you care about most when investing in a buy to let property to understand where the best place to invest in property is.

If your main motive is to find a property that will significantly grow in value, you should focus on the best property growth areas UK-wide. As discussed, the best UK cities for capital growth are considered to be Liverpool, Manchester, Birmingham, Nottingham and Leicester. On the other hand, if rental yields are more important to you, the best investment areas to consider are Liverpool, Manchester, Sheffield, Edinburgh, Glasgow and Newcastle. When thinking about UK property investment on a broader scale, however, the best places to invest in property are normally areas that tick multiple criteria instead of just one. This way, you’re able to benefit from the maximum rate of return through both rental income and capital appreciation. So, with this in mind, where is the best place to buy an investment property if you want to benefit from these returns?

When thinking about the best place to invest in property, UK buy to let investors should definitely look towards either Liverpool or Manchester. These two cities tick all three boxes for affordability, rental yields, and capital growth, and have been hailed the best places to invest in property in 2018, 2019, 2020 and beyond. With a high and growing population of students and young professionals, ongoing regeneration, and predictions for some of the strongest capital growth over the next five years, it’s easy to see why these North West cities are hotspots for buy to let.

The Best Places to Invest in Property UK: A Guide to UK Property Investment Hotspots

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What Are the Top Investment Opportunities Currently Available in the Best Areas to Invest in Property?

If you’re keen to find out about some of the best investment opportunities the UK has to offer right now, and you’re interested in investing in Liverpool and Manchester – two of the best locations for buy to let, take a look at the properties below. Here are three of the most lucrative and exciting buy to let opportunities currently available to purchase from RWinvest.

Merchant’s Wharf – an Exciting Manchester Investment 

Merchants Wharf is one of our newest property investment opportunities, and one that is definitely worth knowing about. Based in between Salford Quays and Manchester city centre, this fantastic investment property is being developed by leading development company, Legacie. Merchant’s Wharf comes with up to 55% below-market rates, with prices starting at only £149,950 which is highly affordable for the area. Investors can also benefit from projected rental returns of 6.5% and plenty of rental demand from Manchester’s growing young professional scene. All in all, this is one of the best buy to let opportunities in one of the UK’s best areas for rental properties.

Parliament Square – Luxurious Liverpool Apartments

If you’re looking for a high yield rental property in the UK, look no further than Parliament Square. Developed by Legacie, Parliament Square is one of the most highly anticipated off plan developments on the Liverpool market today. With a prime location in the Liverpool Baltic Triangle and rental yields of 7%, Parliament Square is one of the best buy to let properties in one of the best locations for buy to let in the UK. Luxury features like a rooftop pool and spa guarantee plenty of tenant demand, while predicted property price growth for Liverpool and the North West region mean some promising capital growth prospects.

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ELEMENT – The Quarter – Eco-Friendly Living

Our new development, ELEMENT – The Quarter, is based in one of the best places to invest in the UK – Liverpool. As the first eco property development in Liverpool, this investment opportunity has been generating a lot of interest from those looking to make a more eco-conscious buy to let purchase. The property incorporates a range of eco-friendly systems and facilities such as rainwater recycling, LED lighting, and more. Alongside rental yields of 8% and prices from just £92,950, an extra incentive to invest in this property is the fact that for every apartment sold in this development, 100 trees will be planted in the Amazon rainforest. Don’t miss ELEMENT – The Quarter if you want to invest in one of the best places to buy property in the UK while also attracting the country’s growing scene of eco-conscious tenants.

Snow Hill Wharf – Stylish Birmingham Property

If you want to invest in a top up-and-coming UK city for property investment, then look no further than Snow Hill Wharf in Birmingham. This stunning set of canal-side apartments start at just £227,500, with sizeable 5% rental yields. Birmingham is an ideal place to invest, with prices set to rocket over the coming years thanks to huge regeneration efforts amid the Commonwealth Games 2022. With excellent connectivity to cities like London and a thriving business scene already, Snow Hill Wharf is one of the most exciting opportunities in the West Midlands.

Explore RWinvest Buy to Let Opportunities for the Best Places to Invest in Property in the UK 2020

If you’re ready to make your UK investment, be sure to explore our current investment opportunities. Here at RWinvest, we focus on high property growth areas in the UK such as Manchester and Liverpool, offering investments in only the very best postcodes for growth and rental yields. Contact us today, and our expert property team will help you secure your ideal UK investment for 2021 and beyond.

For more information on investing in property, head over to our buy to let news and guides pages. Here we have helpful content and tips on how to invest in real estate for UK investors to take on board. If you want to learn more about property investment, check out our guide on the top 10 property investment books.

New Manchester Apartments

Luxury M3 Investment

All-New Manchester Development

Manchester Prices from £121,950

5% Projected NET Rental Return

City Centre Location

New Launch

Merchant's Wharf

Salford Waterfront Apartments

Manchester Prices from £149,950

Up to 6.5% Projected Rental Return

55% Below Market Value

Liverpool Eco Apartments

ELEMENT - The Quarter

New Launch of Eco Development

Liverpool Prices from £92,950

8% NET Rental Return

300m away from new £1b Royal Hospital

DISCLAIMER

The average house price data used in our guide to the best places to invest in property were found using the property market data tool from property website and estate agent resource, Zoopla. For average rental yields, we took Zoopla average property price figures and Zoopla average rental price value figures to calculate a rental yield percentage. Past house price growth statistics were also found through Zoopla, while future property price predictions are based on Savills residential market forecasts.

The statistics in this guide were last updated in October 2020. Depending on the date you’re reading, certain information may have changed and details may be outdated.