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London Loses Top Spot as Best Region for Property Investment Opportunities

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    Property Investor Report Shows Growing Interest in Northern Regions

    According to the latest Property Investor Report from Handelsbanken, London has slipped several rankings when it comes to investor confidence as a region. The report is based on insights gleaned from UK property investors with an average of 35 properties each.

    Choosing the best possible location is key when looking to invest in buy-to-let property, and the report revealed that London has been kicked from the top ranking in 2023, down to joint-fifth in 2024 with 21%. Last year, 27% of investors highlighted London as their top pick, while this year the tides have changed with the East of England, North East and Cumbria and the North West occupying the three top rankings.

    This reflects the decline in popularity when it comes to buy-to-let properties for sale in London, as many investors look to other regions, especially northern ones.

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      What is the Property Investment Market Outlook?

      The research also states that 62.5% of investors plan to grow their portfolio in the year ahead, showing a confident outlook for 2024. 27.5% replied that they are thinking of maintaining their portfolio’s current size, and 8.5% said that they want to exit the market.

      Of those hoping to acquire more properties this year, most investors (70.5%) hope to diversify their portfolios from a geographical and sectoral perspective.

      The majority of respondents believe that the value of their portfolio will rise over the next 12 months, with 81% saying they anticipate this to be the case. 31% said they think it will grow by more than 20% and close to 50% responded with a more modest increase of around 5%.

      James Sproule, UK Chief Economist, at Handelsbanken said: “While headlines over the coming months are likely to be dominated by the general election, interest rate cuts and the ongoing cost of living crisis, these factors don’t seem to be jeopardising investors’ upbeat mindset.”

      “The adjustments to capital valuations, often masked by inflation, as well as increases to rents, have resulted in property once again delivering a premium over gilt yields – and opened up the potential for attractive opportunities as the economic recovery progresses.”

      Learn More: What is a property investor? Find out more about this and how to get into investment property with our RWinvest guides.

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      Residential Flats are Most In-Demand Among Investors

      The report from Handelsbanken also revealed that the most in-demand sectors for property investors this year are residential flats (63%), commercial offices (62%), and residential houses (61.5%).

      Compared to 2023 figures, confidence in these sectors has risen significantly, flats are up 10%, 4% for commercial offices and residential housing is up 15.5% on last year.

      The lowest scoring sectors were commercial retail (50.5%), student housing (49.5%), and residential park homes (32%).

      Andy McCabe, District Head, East of England said: “Our latest report highlights the true breadth and depth of investor appetite across the UK’s varied regions and property sectors.”

      To learn more about the UK property market’s best investment spots, take a look at our buy-to-let area guides covering topics such as investment property available in Coventry, and investment property available in Gloucester.

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      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.