Introduction
As we move into October, it’s clear to me that the UK property market has sustained its momentum through 2025, showing real strength and renewed confidence. Transaction volumes are climbing at pace and rental yields are sitting at their highest level for more than ten years, a clear sign that tenant demand continues to outstrip supply across much of the country.
As always for investors, location remains the single most important decision. Choosing the right city or even the right postcode can be the difference between a steady return and an exceptional one. While the major regional centres such as Manchester, Birmingham and Liverpool continue to perform, it is often the overlooked areas on the fringe of these cities that provide the best opportunities.
In my experience, Salford and MediaCity are excellent examples of this. Both are effectively extensions of Manchester city centre, yet average property prices remain tens of thousands of pounds lower. With regeneration schemes already proven to deliver results and further multi-billion-pound investment now underway, these locations highlight how smart investors can combine affordability with long-term growth. Early regeneration zones such as Trafford Waters offer particularly big opportunities, where entering at the beginning of a project can deliver both strong yields and significant capital appreciation over time.
Why 2025 Is a Defining Year
Before I dig further into city-level opportunities, it helps to step back and see why 2025 (so far) has stood out as a pivotal year in UK property. I have watched the broader trends unfold, and they give a clear signal that things are aligning for both buyers and landlords.
Inflation is no longer spiralling, but it has not plunged either. In August 2025, the Consumer Prices Index (CPI) held steady at 3.8 per cent, unchanged from July. This level is still well above the Bank of England’s 2 per cent target, but its recent stability has reduced some of the unpredictability that plagued earlier years.
Meanwhile, the Bank of England’s base rate is now 4 per cent, following a 0.25 percentage-point cut earlier in August 2025. The Monetary Policy Committee has opted to hold the rate at this level for now, citing ongoing inflationary pressures and uncertainty around economic growth.
These shifts carry real implications for mortgage costs and net yields. Lower base rate translates into somewhat reduced borrowing costs, though lenders will still factor in risk, stress tests, and margin. In practice, landlords may see some easing in financing burden, but not a dramatic windfall.
On the rental side, demand remains unusually strong. Though data is patchy at the macro level, industry reports and my own experience point to rental demand still being significantly higher than in pre-pandemic years, especially in student and regeneration zones. Right now, landlords are benefiting from rent increases of 3–4 per cent year over year in many markets, particularly stronger in high-demand corridors.
Beyond the near term, the long-term picture continues to support investment. Major infrastructure and regeneration schemes, like Northern Powerhouse Rail and the aforementioned Trafford Waters in Greater Manchester, are pushing the geography of value. These projects tend to fuel sustained uplift in both rental demand and capital appreciation as connectivity, amenities, and business growth respond.
When I combine these observations, 2025 emerges not just as a year of recovery, but one of opportunity. Inflation is no longer rising sharply, borrowing is easing, and demand remains elevated. It is a rare moment when market stability, demand strength, and long-term catalysts all line up.
What Makes a Location “Investable”
So now we understand that 2025, moving into 2026, is a strong window of opportunity, the next question is clear, what actually makes a location investable? This is something I am asked almost daily, and the answer always comes back to fundamentals.
One of the first things I look at is the price-to-rent ratio, because this directly influences yield. Put simply, if property values are relatively low compared to the rents they achieve, investors benefit from higher returns on capital. Time and again, it is the northern cities that perform best on this measure. For example, in Manchester the average gross yield is around 5.6 per cent, yet in certain postcodes such as M14, popular with students, yields can stretch into the 8 to 10 per cent range. These are the sorts of numbers that can transform a portfolio’s performance.
Of course, yield alone does not tell the full story. Capital growth is equally important, and the forecasts remain strong. Savills expects UK house prices to grow by 23.4 per cent over the next five years, with England’s northwest leading the way at close to 30 per cent. This kind of compounded growth can be just as powerful as rental income when you take a long-term view.
Another factor I always weigh is tenant demand. Cities with large student populations, high graduate retention and professional migration consistently deliver low voids and stable income. Manchester is again a standout here, with a graduate retention rate of more than 75 per cent, but it is far from the only one. Leeds, Nottingham, Liverpool and Newcastle all have deep tenant pools that underpin resilience.
Finally, regeneration is the catalyst that often turns a good market into an exceptional one. Again, projects such as MediaCity and the next wave at Trafford Waters in Salford are perfect examples. These schemes improve liveability, attract businesses, and push demand higher over the long term. As an investor, I look for that sweet spot where affordability, strong demand, and regeneration come together. When those elements align, the fundamentals are in place for both yield and growth.
Final Thoughts
Looking at the market as it stands, 2025 has proven to be a rare window where the fundamentals are working in favour of investors. Inflation has steadied, borrowing costs are beginning to ease, and tenant demand remains exceptionally strong. On top of this, regeneration and infrastructure projects are redrawing the map of opportunity, especially across the northern regions.
For me, the lesson is simple. When you combine affordability, consistent rental demand, and the right regeneration story, you put yourself in the strongest position to achieve both income and long-term growth. That is why I believe this year, moving into 2026, represents one of the best environments for property investment that we have seen in over a decade.
In my next piece, I’ll break down the cities in detail, exploring where yields are strongest, where growth prospects are most compelling, and which postcodes stand out right now.