In my previous article 2025 UK Property Investment: Where Yield, Growth & Value Align, I explained why 2025 has been such a pivotal year for property investors, and why the fundamentals are lining up in a way we have not seen for more than a decade. The natural next step is to move from that wider perspective and drill down into the specific locations where these trends are playing out most strongly.
I am often asked, “If you had to choose today, where would you invest?” The truth is, there is no single right answer, because the best location always depends on your strategy. Some investors are looking for yield and cashflow, others are focused on long-term capital growth, and many simply want an affordable first step onto the ladder. You can read more about strategies in my Active vs. Passive Property Investment Explained – How to Build Wealth Through Property blog.
What I’m going to do in this blog, however, is share the cities where I see the strongest fundamentals, backed by tenant demand, regeneration and affordability. In this article we will look closely at Manchester, Birmingham, Leeds, Liverpool and a number of emerging cities, highlighting not only the headline figures but also the postcodes and submarkets that I believe stand out right now.
Manchester Investment Case
Manchester remains one of the most compelling cities for property investment in the UK. As someone who has lived in the area all my life, I have seen first-hand how strong tenant demand is here, supported by more than 100,000 students and a graduate retention rate above 75 per cent. This creates an incredibly deep rental market that provides consistent occupancy for landlords.
The numbers back this up. Average prices are around £246,000, with yields sitting at 5.6 per cent across the city. In my view, the real story lies in the growth forecasts. Savills expects nearly 30 per cent capital appreciation over the next five years, which, combined with healthy yields, offers a rare balance of income and long-term upside.
Regeneration continues to radically reshape the city. The Victoria North project is transforming entire parts of the city, while in neighbouring Salford it is still possible to buy one-bed apartments for significantly less than their equivalents in the city centre. In many cases, prices are tens of thousands of pounds lower, particularly in areas at an earlier stage of regeneration. MediaCity has already proven the model, with property values doubling in the past decade thanks to the presence of nationally and internationally recognised organisations like the BBC and ITV. Now Trafford Waters, a £4.5 billion development often described as “MediaCity 2.0,” represents the next wave.
To put the city’s momentum into context, Allied London’s chair recently predicted that the Manchester city centre population could rise from about 100,000 today to 250,000 by 2035. In 1990, fewer than 500 people lived in the centre. That shift alone shows how dramatically Manchester has transformed into a residential hub, and why the pipeline of demand is unlikely to slow any time soon. For investors who position themselves early, Manchester and its fringes offer both short-term rental strength and exceptional long-term growth.
Investment Case: Birmingham
Birmingham remains one of the strongest markets in the UK for property investors, and I’ve watched demand intensify over the past year. The city is undergoing significant transformation. One of the most ambitious projects is the Smithfield regeneration, valued at roughly £1.9 billion. With first-phase planning now approved, this will deliver thousands of new homes and large areas of commercial and public space.
In terms of pricing, data from the ONS shows the average house in Birmingham was around £230,000 in July 2025. While that is a bit lower than some past projections, it still offers relative affordability compared to many southern markets. Rental demand is strong as well, with private rents rising: in August 2025, average rents hit about £1,068 per month, a 5.5 per cent year-on-year increase.
Yields in Birmingham vary significantly by district, type, and property condition, so I prefer to speak in ranges rather than precise figures. Some areas may deliver solid returns above average, especially in regeneration zones or near universities. The University of Birmingham and other higher education institutions anchor consistent tenant demand.
The broader growth outlook for Birmingham is promising but should be considered with realism. Experts note its strength in both rental and price growth among the UK’s “big six” cities, though they caution about regulatory or viability constraints. For investors, Birmingham still offers a compelling blend of income and capital upside, if deals are chosen wisely and entry points are carefully evaluated.
Spotlight on Leeds
Leeds is one of the northern cities I watch closely. As of July 2025, the average house price in Leeds stood at about £240,000. Private rents in Leeds in August 2025 averaged £1,098 per month.
Leeds has a strong rental market backed by its universities and growing numbers of professionals. It is widely recognised that student-dense postcodes like LS6 (Headingley and Hyde Park) often deliver yields above 7 per cent.
The city centre is expanding rapidly. The South Bank scheme and other regeneration initiatives are reshaping inner-city districts and unlocking new areas for investment.
Yields across Leeds vary by location and property type, but in the right submarkets you can combine solid rental returns with capital upside. For investors who pick the right postcodes, Leeds offers a compelling balance of demand, regeneration momentum and affordability.
Spotlight on Liverpool
Liverpool stands out as one of the most affordable major cities in the UK, yet it continues to deliver strong yields and growth potential. As of July 2025, the average house price in Liverpool was approximately £182,000. Private rents are rising quickly too, with the average rent in August 2025 at £864 per month.
Regeneration is the name of the game here. The Liverpool Waters project is central to the city’s transformation, backed by billions in investment, and new infrastructure like public realm and brownfield redevelopment is reshaping the waterfront.
Yields vary by postcode, property type, and condition. Some regeneration zones and high-demand postcodes are achieving returns well above city averages. The city’s affordability, combined with rising rents and major regeneration, makes it a compelling market for yield-focused landlords.
Regional Opportunities: Nottingham, Newcastle, Preston and Stoke-on-Trent
Nottingham
Nottingham remains a consistent performer thanks to its large student population of more than 70,000. The Island Quarter regeneration project is one of the most ambitious in the UK, transforming underused land into a vibrant new district. Average property prices sit around £195,000, with typical yields near 4.9 per cent. In certain student-heavy postcodes such as NG7, yields can rise above 9 per cent, making the city attractive for those targeting high rental income alongside regeneration-driven capital growth.
Newcastle
Newcastle has long been a favourite among investors thanks to its two major universities and growing professional base. Average prices are around £211,000, with year-on-year growth recently exceeding 14 per cent. Yields average about 6.1 per cent, but in the right central postcodes, such as NE1, they can reach close to 9 per cent. Strong student retention, combined with rising demand from the tech and public sectors, provides landlords with consistent rental prospects and a balance of yield and appreciation.
Preston
Preston offers an affordable entry point compared with many northern cities. Average property prices are about £180,000, yet the city benefits from strong rental demand thanks to the University of Central Lancashire and a steady influx of young professionals. The Preston 2035 plan is channelling investment into infrastructure and local development, giving the market a long-term growth story. Yields average close to 4.8 per cent, with central areas such as PR1 delivering nearer 6.5 per cent. For investors seeking affordability combined with stable returns, Preston is an increasingly attractive option.
Stoke-on-Trent
Stoke-on-Trent is emerging as a lower-cost market with rising rental returns. With average prices around £147,000, it offers one of the most affordable entry points among UK cities. Rents have grown strongly over the past year, climbing by more than 12 per cent in some areas, which has pushed average yields to about 5.5 per cent. The Historic Pottery Works redevelopment is a key regeneration project that is revitalising parts of the city and drawing new demand. In postcode ST1, yields can reach around 6 per cent, offering budget-conscious investors a mix of income potential and regeneration-led upside.
Final Thoughts
2025 has proven to be a strong year for property investors, with conditions aligning in a way we have not seen for more than a decade. Inflation has steadied, borrowing is more affordable, and rents are continuing to rise across the country. At the same time, regeneration is reshaping major UK cities, creating fresh opportunities for both income and capital growth.
Manchester, Liverpool, Birmingham and Newcastle all stand out, while fringe areas such as Salford and MediaCity demonstrate how investors can often achieve better value just outside the centre. Early entry into large-scale projects like Trafford Waters offers another clear path to long-term gains. For those seeking faster returns, serviced accommodation can add strong cashflow alongside traditional buy-to-let growth.
The key is to be clear about your investment goals first, and then match the right city and strategy to those goals. The most successful investors I work with are those who combine strong yields with long-term capital growth, building both income and wealth together.