10 Best Places to Invest in the UK

Did you know that house prices in the UK increased by 1.2% in November, which is the fastest monthly growth since March 2022?

With higher annual growth, the property market is attracting more investors, defying expectations as we head into 2025. 

This year has definitely set the stage for opportunities considering rising transactions and increasing mortgage approvals. 

But what are the best places in the UK that have the potential to give you the highest returns while providing stability?

Why invest in UK property investment?

The property investment UK is witnessing an annual growth of 3.7%, even amidst economic shifts. Recent economic stability, driven by measures like the Bank of England’s base rate cut, has increased investor confidence. Mortgage approvals in October reached their highest since August 2022.

Also, transactions exceeded pre-pandemic averages for the first time since 2022, highlighting a sustained market.

Changes in the near future, such as the reinstatement of lower stamp duty thresholds in April 2025, further incentivize early investments.

This creates a prime window to secure assets before additional tax pressures come into play.

With regional disparities offering a host of different opportunities high growth in Scotland to more affordable areas of the UK like the North East-the time to make the most of the UK property market’s changing dynamics is now. Invest smartly today, and the returns could be considerable tomorrow.

Best Buy to Let Areas in UK

Savills’ annual cross-sector forecasts underlined eight asset classes that are expected to return more than 8% annually. This is topped by residential buy-to-let in the North West, London industrial properties, and retail warehouses, which are all set to achieve returns between 8.5% and 9.2% over the next five years.

Here are the 10 best buy-to-let areas in UK for 2025 and beyond:

1. Sunderland 

With the University of Sunderland driving up the student population in the city, Sunderland has seen infrastructural property investment such as the Sunderland Strategic Transport Corridor. In addition, there is the Riverside Sunderland regeneration project that has breathed life into the local economy, creating more jobs and thus greater demand for housing. Put together, these factors have ensured that Sunderland offers sustainable rental growth with low property acquisition costs, making it a key destination for buy-to-let investors looking for high yields and future appreciation.

Average rental yield: 8.96%

Average Property Price: £83,842

2. Aberdeen

Aberdeen boasts strong rental yields of 8.03%, the product of an energy sector, even at a time when the oil markets were depressed globally. The city remains appealing for professional investors because of its focus on renewable energy, including developments in offshore wind and hydrogen that guarantee long-term economic stability.

Affordable property prices plus higher demand for rentals, underpinned by students and young professionals, make Aberdeen a perfect buy-to-let market.

Such initiatives in urban regeneration, as is happening with the Union Terrace Gardens, further enhance the city’s appeal and its long-term investment potential for landlords seeking stable returns.

Average rental yield: 8.03%

Average Property Price: £102,920

3. Burnley

Employment growth, besides other industrial development, adds to it through the Burnley Bridge Business Park. In addition, the M65 and rail connectivity ensure it is a suitable base for commuters.

Urban regeneration initiatives which include improving public space and housing stock make Burnley a great opportunity for the buy-to-let investor looking for affordable yet high-yielding opportunities.

Average rental yield: 8.00%

Average Property Price: £84,869

4. Dundee

Dundee is growing into a technology and cultural centre, with the £1 billion Waterfront regeneration, housing, business spaces, and the opening of Eden Project Dundee in 2025. Backed by Abertay University, its digital innovation credentials continue to attract students and young professionals alike.

Relatively low property prices (£116,690) combine with high demand from tenants to provide a stable, high-yielding investment.

Average rental yield: 7.96%

Average Property Price: £116,690

5. Glasgow

Large projects, like the Glasgow City Deal and Smart Canal, have expanded infrastructure and connectivity further to drive economic growth. Likewise, with its rich cultural appeal and other regeneration projects like Clyde Gateway, young professionals and families alike ensure continued demand as tenants for buy-to-let properties. 

The Clyde Gateway Regeneration in Glasgow developed Scotland’s largest single urban renewal project, transforming neighborhoods and attracting businesses.

The further development of the Innovation District, together with a £1.2 billion City Deal infrastructure upgrade, cements Glasgow as an economic powerhouse.

Average rental yield: 7.95%

Average Property Price: £143,617

6. Middlesbrough 

The Teesworks Freeport and South Tees Development Corporation have transformed the local economy, creating thousands of jobs and increasing housing demand. Its affordable living and proximity to nature reserves appeal to young families and professionals, while Teesside University attracts students. 

These make Middlesbrough one of the cost-effective yet high-yielding options for a buy-to-let investor looking for long-term growth opportunities.

Middlesbrough also has the UK’s largest freeport, Teesworks Freeport, attracting international investment and creating thousands of jobs. 

Meanwhile, upgrades scheduled at Middlesbrough Station will further enhance regional connectivity, while the Boho Zone continues to drive growth in digital and creative industries, fueling housing demand from both professionals and students.

Average rental yield: 7.92%

Average Property Price: £92,862

7. Blackburn

The Blackburn Town Centre Masterplan reflects Blackburn for a rental yield of 7.52%, with its developments in retail, leisure, and residential. Development at Pennine Industrial Estate improves employment prospects, while relatively inexpensive property prices (£105,460) make it attractive for investment. 

With its proximity to Manchester and improvements in its rail service under the Northern Powerhouse scheme, makes it an excellent choice for professionals and families seeking affordable housing within commuting distance. The town also benefits from its industrial base, strong logistics sector, and strategic location in proximity to Manchester. 

At present, regeneration projects include the Blackburn Growth Axis and town center improvement, ensuring jobs and infrastructure improvement.

Additionally, value for money in rent makes Blackburn a good opportunity for renters, thereby assuring buy-to-let investors of assured yield and growth in this destination.

Average rental yield: 7.52%

Average Property Price: £105,460

8. Hull

Economic growth and job creation are boosted by the city’s emphasis on renewable energy, with Siemens Gamesa’s offshore wind projects, and investment in port infrastructure. Similarly, the Hull City Plan incorporates significant urban regeneration that enhances the city’s attractiveness for renters. 

Hull’s transformation is being driven by its role in the Humber Freeport, driving investment in renewable energy and creating over 7,000 jobs. 

The Siemens Gamesa expansion cements Hull’s status as a wind energy powerhouse. The £250 million Albion Square redevelopment, due for completion in 2025, brings in modern housing and retail space and increases demand among tenants.

Average rental yield: 7.45%

Average Property Price: £98,617

9. Newcastle 

New businesses created from the £350 million Newcastle Helix project place the city at the forefront for jobs in science, technology, and research. 

Upgrades to its infrastructure, including the Central Station redevelopment and the restoring of the Tyne Bridge, will further improve travel links and urban appeal. 

With its status as a regional economic hub, the city boasts thriving tech and digital industries, supplemented by projects such as Newcastle Helix. Improvements in infrastructure include the upgrade of Newcastle Central Station, improving connectivity and making it more attractive for both tenants and landlords.

Average rental yield: 7.45%

Average Property Price: £134,245

10. Liverpool

Backed by value-for-money more affordability at £129,172, and urban regeneration projects that are still ongoing, including the Liverpool Waters and Knowledge Quarter, Liverpool’s rental yield stands high. 

Its position as a port city with good links to other regions also makes it a good target for renters. Further investment in infrastructure and the revitalization of housing have solidified Liverpool’s reputation as a profitable destination for buy-to-let. 

The £5 billion Liverpool Waters project is transforming the docklands into high-end residential and commercial spaces, driving up rental demand.

Besides, travel improvements owing to the extension of Merseyrail and its linkage with HS2 add to Liverpool’s connectivity with other major cities, adding to its attraction for 2025.

Average rental yield: 7.44%

Average Property Price: £129,172

Current State of real estate investment UK 

After economic challenges and fluctuating market conditions, the housing sector is now recovering after declining prices in 2023. As such, let’s explore what real estate investment looks like towards the end of December 2024, along with a brief outlook for the next year.

1. Fluctuating house prices

In 2023, house prices fell, mainly due to high mortgage rates and living costs. It declined by 1.4% as a whole. However, this trend reversed in late 2024 when the mortgage rates relaxed. 

By Q3 2024, sales of property increased by 23% year-on-year to reach 332,200 transactions, primarily being first-time buyers.

Prospective growth in house prices are expected at 2.5% in 2024, 4% in 2025, and 23.4% by 2029. Such an upward curve suggests high capital appreciation prospects.

2. Rising rental income opportunities 

The rental market is also experiencing continued growth, with rents increasing by 8.4% year-over-year in 2024. London leads with nearly 10% inflation, followed by strong performance in other regions like Yorkshire and the South West. In 2025, gross rental yields are projected to remain high, reaching up to 7.2%, making buy-to-let properties an attractive investment.

3. Improved mortgage affordability 

Mortgage rates are set to decrease further, following the Bank of England’s cut from 5% to 4.7% in late 2024. This will continue through 2025, with rates predicted to drop to 4.16%. Lower borrowing costs have increased investor affordability, encouraging both first-time buyers and experienced investors to enter the market.

4. Historic ROI outperforming inflation 

The UK’s real estate market has historically delivered great returns, with property values outpacing inflation and other asset classes. From 2013 to 2024, property prices rose by 72%, showing its long-term profitability.

5. Supply challenges amidst high demand

Efforts towards enhancing affordable housing options by delivering more Social Rent homes remain promising but are short of meeting the market requirements. Inventory levels remain very low, while new build delivery grew only 12% and demand surged 20%. 

Such a persistent disequilibrium makes real estate an excellent investment in regions experiencing the growth of new builds with high demand.

What are the property investment options in the UK?

Investors can explore opportunities such as residential buy-to-let, serviced accommodations, commercial properties, student housing, and the increasingly popular BRRR (Buy, Refurbish, Rent, Refinance) strategy.

Among these, transitioning traditional buy-to-let into serviced accommodations or leveraging the BRRR model maximizes returns. 

1. B2SA

B2SA properties are intended for short-term renters such as tourists, business travelers, or temporary housing. Unlike traditional buy-to-let investments, Buy-to-Serviced-Accommodation focuses on creating high-quality, flexible spaces that can generate higher yields through short-term rental income.

Aside from rental income, such operated properties tend to appreciate because they are in high demand key locations, which generally contributes to higher long-term investment returns.

At Pluxa Property, our New Build Serviced Accommodation plan offers luxury apartments with necessary permissions, yielding up to 15% rental yields and £1,000+ monthly cash flow for those seeking hassle-free investments. 

For investors looking to maximize returns with a lower initial outlay, our Buy-to-Refurb plan delivers up to 20% rental yields, 30% ROI, and over £2,000 in monthly cash flow.

2. R2SA

Focusing on high-demand properties in key locations, R2SA or Rent-to-Serviced Accommodation provides a stream of steady income with significantly lower risks associated with the traditional buy-to-let model. 

R2SA works especially well to promote investments in real estate related to places that are very in demand for tourism and corporate travel. However, it is not easy and does require professional management.

At Pluxa Property, we secure medium to long-term corporate bookings through our sister company, Pluxa Stays, which guarantees our clients a steady cash flow. From sourcing high-potential properties to managing every aspect of guest experience, we handle the complexities so you can enjoy passive income. 

With an R2SA investment of just £10k, you might generate up to £1k in monthly cash flow, and over three years, a £30k investment can yield over £100k in returns.

3. BRRR

The Buy, Refurbish, Rent, and Refinance is a proven real estate investment strategy for building long-term wealth in real estate by leveraging equity growth and rental income. 

This strategy allows investors to acquire undervalued properties, improve their value through refurbishments, and generate significant cash flow while refinancing to release equity for future investments. 

The BRRRR method is very effective in high-demand rental markets and is best suited for building a diversified real estate portfolio with minimal initial capital. 

We help investors reduce all the complexities in BRRR by leveraging our experience at Pluxa Properties for more than 40 years and our local regulations to a great extent. Thus, our experience makes sure that our clients obtain only the best deals. Hence, they save both their precious time and money while acquiring a seamless investment.

Best areas for rental properties in UK

Here are some of the best areas where you can find rental properties in the UK:

1. Birmingham 

Birmingham is forecasted to see a 19.9% property price increase and a 22.2% rental growth by 2028, driven by the ambitious Future City Plan. HS2 continues to elevate Birmingham’s connectivity, reducing travel times to London. Grand Central and the ongoing Metro expansion will also enhance regional and national transport links.

Another factor to keep in mind is the city’s mixed-use developments like SETL in the Jewellery Quarter are setting new living standards, further boosting demand. Selly Oak, Bordesley Green, and City Centre are the highest yielding areas in Birmingham.

Average property price: £228,000

Average rental yield: 5.21% (up to 7% in areas like Selly Oak)

2. Derby 

In Derby, rental prices rose 9.3% in 2023–24, due to a strong demand. Positioned at the heart of the UK, Derby offers exceptional connectivity with 17 universities within an hour’s travel, fueling a large student base. With 48% of the population under 35, Derby has a solid demand for rental properties, particularly from graduates and young professionals.

It is also forecasted a 22.8% property price growth, and The Derby 2030 Masterplan is transforming the city, adding modern housing and infrastructure.

Average property price: £199,000

Average rental yield: 4.51%

3. Leeds 

Leeds boasts a £64.6 billion local economy, making it one of the fastest-growing cities in the UK. It is also home to over 65,000 students from universities like the University of Leeds, and its 18.8% property price growth by 2028 is set to outpace the national average.

Additionally, migration from London to Leeds has doubled in the last decade due to affordability and quality of life. Some rental hotspots are LS3, Burley, and Harehills.

Average property price: £234,000

Average rental yield: 5.61%

4. Manchester 

Home to MediaCityUK and a successful digital sector, Manchester attracts young professionals seeking rentals. Large-scale regeneration projects like the £1 billion Northern Gateway and Victoria North developments are transforming underused areas into residential and commercial spaces.

Its extensive tram system and Manchester Airport also increase connectivity. Similar to other areas, Manchester also has a student population of over 100,000. 

It’s also well-connected, with the HS2 project set to further enhance its links to London and other major UK cities. The Metrolink tram system and Manchester Airport, one of the UK’s busiest, make the city accessible to commuters and international travelers, increasing the appeal of properties near transport hubs.

Average property price: £260,000 (estimated based on historical data)

Average rental yield: 6–7% in key areas

5. Liverpool 

Liverpool offers some of the most affordable property prices among major UK cities, making it ideal for first-time investors. With significant regeneration projects like Liverpool Waters, rental demand is rising. The city has benefited from ongoing regeneration projects, such as the £5 billion Liverpool Waters development and the expansion of the Knowledge Quarter.

These projects are transforming the city into a hub for education, innovation, and business, contributing to tenant demand. 

Major infrastructure investments, such as the Liverpool City Region Metro Mayoral Plan, are improving transport links and accessibility. The Paddington Village development, a £1 billion project within the Knowledge Quarter, is a standout initiative expected to enhance property value and rental yields in the area.

Average property price: £182,000

Average rental yield: 6.5%

Final words

The UK property market shows strong potential for 2025 and beyond, with projected price growth of 4% in 2025 and 23.4% by 2029.

Cities like Sunderland, Aberdeen, and Burnley offer attractive rental yields above 8%.

Investment strategies like B2SA, R2SA, and BRRR provide diverse opportunities for investors.

With improving mortgage affordability, rising rental demand, and ongoing urban regeneration projects across major cities, the UK real estate market remains a compelling choice for both domestic and international investors seeking long-term returns.