Best Places to Invest in UK Property in 2023

Average Property Price: £177,803
Average Rental Yield: 7.71%
Predicted Growth by 2027: 11.7%

Ranked second for capital growth in the UK, Liverpool offers the perfect blend of high property price growth, low property prices, and an in-demand private rented sector.

A mainstay on anyone’s list of the best and most affordable places to invest in property in the UK, Liverpool has had a similar meteoric rise to Manchester.

Previously a city suffering from economic decline, UK regeneration has helped transform Liverpool into the economic powerhouse you see today.

Now:

Liverpool property investment is a top choice for many – with the city being one of the most affordable on this list and essentially leading the charge when it comes to house price growth.

According to the UK House Price Index, Liverpool has beaten out some of the UK’s largest cities in terms of capital growth – seeing an increase of 7.10% on the year and 40.2% over the last five years.

This puts Liverpool at the very top of the country in terms of capital growth.

However, rents have not risen at the same rate as house prices, meaning rental yields in Liverpool are not as high as in other cities. Nevertheless, you’re still getting a high yield combined with affordable prices, making it more likely you will see strong returns.

Factoring in a young city centre population (75% are aged 17 to 29) and rental prices set to rise in 2023, private landlords can make a top purchase in Liverpool.

Thanks to the range of highly-respected universities in Liverpool, the Merseyside city is also one of the best places to invest in student property right now.

The University of Liverpool and Liverpool John Moores University combine to bring over 48,000 full-time students to the city, per The Times.

In an effort to tackle climate change, the city has also seen the introduction of eco-properties.

This is exactly what the name implies – developments purposely built with sustainability in mind and are often made with environmentally-friendly materials and low-carbon technology.

Average Property Price: £190,354
Average Rental Yield: 9.88%
Predicted Growth by 2027: 8.9%

Home to the UK’s highest average rental yields and equipped with some impressive house price growth, Nottingham is one of the sleeper hits in the UK rental market.

In fact, its popularity is one of the main reasons Nottingham property investment ranks as one of the best places for property investment in the UK.

The city has recorded impressive house price growth over the last five years, with prices rising by 9.29% in the last year alone! Nottingham has seen house prices rise by 39.5% since 2018, which is over 12% higher than the national average, so investors looking for capital growth should definitely consider the city for investment.

The Nottingham Post reports that demand for housing in Nottingham is still ‘very strong’ at the beginning of 2023, despite the cost of living crisis and rising mortgage interest rates.

With affordable house prices nearly £100k below the UK average, Nottingham is well-known for its excellent employment sector.

Nottingham features over 50 Business headquarters, including Boots and E.ON, plus the likes of Rolls Royce and Midlands Aerospace call the city home.

Even better:

13% of Nottingham’s population are students, making a student property investment a top choice in 2023.

Both Nottingham Trent University and the University of Nottingham are also highly respected, coming in at 62nd and 63rd respectively in the Guardian’s rankings of the UK’s top universities.

Average Property Price: £235,566
Average Rental Yield: 9.06%
Predicted Growth by 2027: 11.7%

With an average property value of £235,566, Leeds is a bit pricier than other places on this list, but don’t be fooled – this Yorkshire city is well worth its entry price.

Ranked as 3rd for UK rental yields and 5th for capital growth, rental properties have seen massive demand in Leeds thanks to its incredible employment opportunities.

Boasting the second-largest banking and finance sector in the UK and acting as the UK’s largest centre for law, Leeds is overflowing with business opportunities in 2023.

Institutions and organisations like Leeds Teaching Hospitals NHS Trust, Jet2, First Direct and Channel 4 all call the city home, which has since attracted thousands of aspiring young professionals.

Crucially:

Leeds is also set for historical growth from regeneration efforts, with South Bank Leeds set to double the city centre’s size by creating 35,000 new jobs and 8,000 new homes.

Thanks to the great employment opportunities and regeneration efforts, Leeds has seen house prices rise substantially, nearly 5% over the national average since 2018

With perks like these, it’d probably be rude not to give Leeds property investment a chance if you are wondering where to buy property in the UK in 2023.

Average Property Price: £141,837
Average Rental Yield: 5.10%
Predicted Growth by 2027: 11.7%

We thought we would throw a curveball in this ranking with a city you may not have thought about.

And you might be thinking:

‘An average price that low?! That’s nothing special!’

And you’re right, it isn’t – but that’s not why Middlesbrough has made our list.

Instead, this North Yorkshire town boasts the seventh-highest capital growth in the UK, with prices rising by 30.67% over the last five years.

Now:

Investing just for capital growth is incredibly risky, as there is simply no way to guarantee that your house increases in value – nor are we suggesting you should do this without the income to back it up.

It’s not just us who consider Middlesbrough to be a sleeper hit. Zoopla recently ranked the town as one of the ten highest-yielding areas in the UK.

When multiple sources are saying this is one of the best places in the UK to buy investment property, it’s likely they’re not far off the mark.

With that being said, the town has seen a lower rate of capital growth than you might like. With an average growth of 7.76% in the last year, you’ll see a solid rate of growth to go along with the strong yields.

However, we thought it was well worth mentioning, with the potential to earn a mind-blowing return on your rental property – just make sure you choose an investment property with the average rent needed to sustain investment.

Average Property Price: £236,026
Average Rental Yield: 6.87%
Predicted Growth by 2027: 11.1%

Cardiff is probably the first city to jump to mind whenever you think of property investment in Wales.

And while the capital is an excellent choice, a Welsh city you may not have considered is Newport.

Not to be confused with Newport in Shropshire or the Isle of Wight, Newport is the third-largest city in Wales and benefits from an excellent location just 12 minutes from Cardiff via the M14.

Almost £25k cheaper than property in Wales while offering solid rental yields, Newport property investment may be the perfect choice for Welsh landlords in 2023.

The city was also rated as the third best place to live in the UK by Adzuna, thanks to the job vacancies and salaries offered – a positive sign for any potential property investors.

Newport has also seen a huge amount of capital growth over the past few years, with the second-highest five-year growth rate of all cities on this list! With prices rising by 40.61% since 2018, Newport is one of the best places to invest in property in the UK if you are looking to earn through capital growth.

This graph shows just how rapidly the city has seen house prices rise over the last few years.

Currently, the best places to invest in the UK for rental yields in 2023 are Nottingham, Glasgow and Leeds, which show average rental returns of over 9%. Don’t skip these cities if you’re looking for the best places to buy rental property in the UK.

Like most things, investment works best when you have one eye toward the future.

Whilst they may not necessarily be the best place to buy investment property today, the following towns and cities are worth keeping your eye on.

Their stats are not yet on the level of the ten mentioned in this guide to the best places to invest, but the potential for growth and upcoming regeneration means they could very well be on their way to overtaking the top contenders in the coming years.

After all, who knows what tomorrow will bring? We think these areas of the UK have the potential to crack the top ten and become some of the best places to invest in UK property in the coming years.

Luton Property Investment

Ideal for those looking for a London commuter property outside of the capital, Luton is currently a popular destination for many first-time buyers in the UK and is definitively one that to keep your eye on – especially for those investors looking for decent capital gains with a lower entry point.

With a solid regeneration plan in place, the town is looking to combat its housing shortage by building new homes to meet demand.

According to home.co.uk, the average rent in London is 30% higher than that in Luton, standing on the average at £1,427.

Slough Property Investment

With a thriving economy, excellent growth rates, and fantastic transport links, Slough is an up-and-coming UK town growing more popular in 2023.

Another commuter town just outside London, Slough also enjoys a robust rental market due to demand from professionals wanting the Slough and London business scenes – at a much more affordable price than the capital city.

The regeneration and economic schemes in place are also eye-catching.

Based on Zoopla’s latest data in 2022, the average property in Slough is expected to generate yields of up to 4.23% – another one to look out for; Slough could very well be the next buy-to-let hotspot.

Hull Property Investment

Hull is another up-and-coming UK hotspot for property investment. This Yorkshire city boasts an average property price of just £138,595 and offers average rental yields of around 5%.

After being named 2017’s Capital of Culture, over £1.5 billion worth of investment has been poured into the city over the past eight years.

Wigan Property Investment

Located in Greater Manchester, Wigan is an under-the-radar town that holds a lot of potential for property investment.

With its great positioning on the Manchester commuter belt and millions worth of regeneration coming into the town, Wigan also has a very affordable average property price of only £184,825, meaning you can target those commuting to Manchester for a far cheaper price. Investment opportunities like Vantage Point in Wigan start from just £132,950 and offer 7% rental returns.

These towns and cities have substantial ongoing regeneration efforts and could soon have the property stats needed to be some of the best places to invest in property in the UK in the near future.

The statistics used in this list were calculated by our writers and came from various sources.

Property price predictions were taken from Savills’ regional house price growth predictions for 2023-2027.

The average rental income was taken from Home.co.uk.

Average house prices were taken from the UK House Price Index, and past growth was calculated using their data.