Best Places to Invest in Property in the UK in 2025

By Invest In England Team • September 2025

The best places to invest in property in England in 2025 are Manchester, Birmingham, Leeds and Liverpool. Each city offers gross rental yields of 5% to 10%, growing professional and student populations, and major infrastructure investment that supports long-term capital growth. London, by contrast, produces gross yields of 3% to 4% on most residential stock, making the capital a poor choice for income-focused investors working with budgets under £1 million.

How We Rank UK Property Investment Locations

Ranking investment locations requires more than a single metric. A city with a 10% gross yield means nothing if properties sit empty for three months between tenants. Equally, a location with strong capital growth but a 3% yield may not service a buy-to-let mortgage at today's interest rates.

We assess locations across five criteria: gross rental yield, average void periods (the time a property sits empty between tenancies), employment base and job growth trajectory, population trends and migration patterns, and the volume and quality of public and private infrastructure investment committed to that city.

All four cities in this guide score well across most or all of these criteria. That is not a coincidence. Strong employment creates tenant demand. Population growth creates housing pressure. Infrastructure investment signals political and commercial confidence in a location, and typically precedes a period of price appreciation.

The data in this article draws on published Land Registry figures, Rightmove rental data, and ONS population and employment statistics. Yields quoted are gross and based on typical achievable rents relative to current purchase prices. Net yields, after management fees, maintenance, and void periods, will be lower. All investment carries risk and past performance does not indicate future results.

For investors who want to focus specifically on buy-to-let property sourcing or who are considering HMO property sourcing for higher income, the city profiles below will help you identify where to concentrate your research.

Manchester: 6 to 7% BTL Yields and Strong Regeneration

Manchester has been England's most talked-about investment city for the past decade, and it continues to justify that attention in 2025. The wider Greater Manchester metropolitan area has a population of 2.87 million, making it the second-largest conurbation in England. The city's economy is broad-based, with strengths in financial and professional services, technology, creative industries centred on MediaCityUK in Salford, and a significant healthcare and life sciences cluster.

Gross BTL yields across Greater Manchester run from 5.5% in more established residential areas to over 7% in postcodes with high student and young professional demand, particularly around the universities, Salford, Stockport, and Oldham. Average residential property prices in Manchester city centre sit at approximately £220,000 to £280,000 for a one-bedroom apartment, with achievable rents of £1,100 to £1,400 per month in strong locations.

The city benefits from ongoing regeneration across multiple zones. The Northern Gateway masterplan proposes 15,000 new homes in north Manchester. The Mayfield neighbourhood, adjacent to Piccadilly station, is being transformed into a 24-acre mixed-use district. HS2 connectivity, even in its revised form, maintains Manchester's position as a major business destination.

Vacancy rates in Manchester are among the lowest in England outside London, with well-presented properties in strong areas typically let within two to three weeks. For investors who want a city with a proven track record, deep liquidity when it comes to selling, and a broad tenant base, Manchester remains the benchmark.

Birmingham: 5 to 7% Yields and the Youngest City in Europe

Birmingham's investment case in 2025 is built on demographics as much as yield. The city has the youngest average population of any major city in Europe, with over 40% of its population under 25. This creates sustained, structural demand for rental housing that is not dependent on a single employer or sector. A young population rents before it buys, and Birmingham's homeownership rates are below the national average, which means a large proportion of that population is in the private rental market.

Gross BTL yields in Birmingham range from 5% in more affluent residential suburbs to 7% or above in areas with high rental demand such as Selly Oak, Erdington, Handsworth, and Bordesley Green. HMO properties in student-heavy areas near the University of Birmingham and Birmingham City University regularly achieve gross yields of 10% to 14%.

The scale of committed investment in Birmingham is significant. The £700 million Paradise development in the city centre is transforming the commercial core. The Curzon Street HS2 station is under construction and will position Birmingham as a 45-minute commute from London. The broader West Midlands Combined Authority has committed over £15 billion in regeneration and infrastructure investment across the region.

Average property prices in Birmingham remain well below Manchester and Leeds for comparable stock, which means the entry point is lower and the yield is sustained by that lower denominator. For investors with a five to ten year horizon, Birmingham combines current income with meaningful capital growth potential.

Leeds: 6 to 8% Yields and the Fastest Growing UK Economy Outside London

Leeds has been one of England's best-kept investment secrets, though that is rapidly changing as more investors look beyond Manchester and Birmingham. The city's economy grew faster than any UK city outside London over the period from 2015 to 2023, driven by a combination of financial services expansion, a growing tech sector, and major public sector employment anchored by the NHS and central government offices.

Leeds is England's largest financial centre outside London, with over 30,000 people employed in financial and professional services. Major employers including HSBC, Sky Betting and Gaming, Asda, and Channel 4 (which relocated its national HQ to Leeds) have created a substantial professional workforce that drives demand for quality rental accommodation.

Gross BTL yields in Leeds range from 6% to 8% across a variety of postcodes, with the best returns found in areas with high student and young professional demand such as Headingley, Hyde Park, Burley, and Beeston. Average property prices for a two-bedroom terrace in a strong rental area range from £150,000 to £200,000, with achievable rents of £850 to £1,100 per month.

The city has two large universities, the University of Leeds and Leeds Beckett, with a combined student population of over 60,000, sustaining a substantial year-round rental market. The South Bank regeneration project, one of the largest brownfield development schemes in Europe at 136 hectares, will add significant residential and commercial stock to the city over the coming decade.

Liverpool: 7 to 10% Yields and the Highest Returns in England

For investors whose primary objective is rental income rather than capital growth, Liverpool is the strongest city in England. Gross rental yields of 7% to 10% are achievable in a number of Liverpool postcodes, driven by the combination of very competitive property prices and solid rental demand from students, young professionals, and key workers.

The postcodes that consistently produce the strongest yields include L1, L2, L3, L6, L7, and L15. Average purchase prices for a well-located two-bedroom property in these areas range from £80,000 to £150,000, with monthly rents of £700 to £1,100 achievable on well-presented stock. The arithmetic of these numbers produces gross yields that are difficult to match anywhere else in England.

Liverpool has two large universities, the University of Liverpool and Liverpool John Moores University, with a combined student population of approximately 50,000. The city also has significant NHS employment, a growing digital and creative sector, and a major logistics and port economy. These multiple employment anchors reduce the risk of a single-sector downturn wiping out rental demand.

The Liverpool Waters development on the waterfront, part of a wider Peel Holdings investment programme, is adding commercial and residential space to the northern dock area. The Paddington Village scheme in the Knowledge Quarter is creating a 450-acre hub for health, science and higher education. Both projects add to the city's long-term tenant base.

Investors should be selective about specific properties and streets. As with any city that offers high yields, there are areas of Liverpool where the yield is high because demand is weaker or property conditions require significant capital expenditure. Due diligence at street level is important.

Why Northern England Outperforms London for Rental Yield

The yield gap between Northern English cities and London is structural, not cyclical. It comes down to the relationship between property purchase prices and achievable rents.

In London, the average residential property price is approximately £500,000 to £600,000. Average monthly rents for a two-bedroom flat in zone 2 to 3 are around £2,200 to £2,800. That produces a gross yield of approximately 4% to 5.5% on purchase price, and net yields after costs that often fall below 3%.

In Northern English cities, a two-bedroom property purchased for £120,000 to £180,000 can achieve monthly rents of £750 to £1,100. The resulting gross yield of 6% to 8.5% means the income from the property is a significantly larger proportion of its cost. At current mortgage interest rates, a Northern English BTL property is far more likely to cashflow positively from day one than a London equivalent.

The lower entry price also allows investors to spread capital more effectively. An investor with £200,000 to deploy can purchase one London property with a typical deposit, or two to three Northern English properties with equivalent deposits, creating a diversified income stream rather than a single point of exposure.

London's advantage is long-term capital appreciation, and that advantage is real. But for investors who need income now, or who are building a portfolio on mortgage finance, the numbers favour the North decisively.

What to Look for in a Property Investment Location

The four cities above all score well on the metrics that matter. But within any city, there are strong streets and weak ones. Here is what to assess before committing to a specific location.

Employment anchors. Look for areas within commuting distance of major employers, hospitals, universities, and transport hubs. These create reliable, year-round tenant demand that is not dependent on seasonal or cyclical factors.

Void periods. Ask letting agents what the typical void period is for the type of property you are considering. Properties that sit empty for more than two to three weeks between tenancies in a normal market may be in a location with structural demand issues.

Property condition and running costs. An older property may offer a lower purchase price but higher ongoing maintenance costs. A newer build may carry a service charge and ground rent that erode net yield. Factor all costs into your yield calculation before making an offer.

Regeneration pipeline. Areas with committed public and private investment tend to see property values and rents rise over time. Planning applications, council investment plans, and major employer announcements are all indicators of future growth.

Exit liquidity. Consider how easy it will be to sell the property when you want to exit. Properties in strong locations with broad appeal to owner-occupiers as well as investors are easier to sell at full value than those in areas where the buyer pool is limited to landlords.

If you want to access specific deals in any of the four cities covered in this guide, contact our team and tell us your target city, budget, and strategy. We source off-market property deals across all four markets before they reach the open market.

Frequently Asked Questions

What is the best city to invest in property in England in 2025?

Liverpool, Manchester, Leeds and Birmingham consistently rank as the top cities for property investment in England in 2025. Liverpool offers the highest gross yields at 7% to 10% in strong rental areas. Manchester delivers a balance of yield (6% to 7%) and capital growth. Leeds has the fastest-growing economy outside London with yields of 6% to 8%. Birmingham combines a young population with major regeneration investment and yields of 5% to 7%. The right city depends on your priorities for income, growth, and investment horizon.

Is Manchester or Birmingham better for property investment?

Both cities offer strong investment cases. Manchester typically produces slightly higher gross yields (6% to 7%) and has a longer track record of capital growth. Birmingham has a younger population structure, lower average entry prices in many areas, and a larger scale of committed regeneration investment, giving it potentially higher capital appreciation over a longer horizon. Investors who want more immediate income tend to prefer Manchester. Those taking a longer view often find Birmingham compelling. Both significantly outperform London on rental yield.

What rental yields can you expect in Northern England?

Gross rental yields in Northern English cities range from 5% to 10% depending on city, property type and location. Liverpool produces the highest yields at 7% to 10% in strong areas. Manchester and Leeds offer 6% to 8% in well-chosen postcodes. HMO properties across Northern England regularly achieve 10% to 15% gross in licensed areas. These figures contrast with London, where gross yields on residential property typically sit at 3% to 4%. Net yields after management fees, maintenance, and void periods will be lower than the gross figures quoted.

Is Liverpool property a good investment in 2025?

Liverpool remains one of England's strongest investment locations on a yield basis in 2025. Gross returns of 7% to 10% are achievable in postcodes with strong tenant demand, particularly in L1, L2, L3, L6, L7 and L15. Property prices remain well below the national average, which produces proportionally higher income returns. The city's ongoing waterfront regeneration, two major universities, and growing knowledge economy sustain rental demand. Investors should conduct thorough street-level due diligence, as quality varies significantly within Liverpool postcodes.

Why do Northern English cities outperform London for rental yield?

The yield gap is structural. In London, average property prices of £500,000 to £600,000 produce rents that, while high in absolute terms, do not scale proportionally, resulting in gross yields of 3% to 5%. In Northern cities, properties purchased for £100,000 to £200,000 can produce monthly rents of £700 to £1,100, generating gross yields of 6% to 10%. The lower entry cost also allows investors to spread capital across multiple properties rather than concentrating it in a single London asset, creating a more resilient income stream.

What should I look for in a property investment location?

The key factors are: gross and net rental yield, average void periods in the area, strength and diversity of the local employment base, population growth trends, volume of committed regeneration and infrastructure investment, proximity to transport links and universities, and the liquidity of the resale market. A location that scores well across most of these indicators is more likely to deliver reliable returns than one that appears attractive on yield alone but has structural weaknesses in other areas. Always assess at street level, not just city level.