Top UK Regional Hotspots for Property Investment in 2025
As we move deeper into 2025, one truth remains clear: the UK’s best property investment opportunities are no longer concentrated in London and the South East. With affordability stretched and rental yields compressed in those markets, savvy investors are increasingly turning their attention north — to the regional cities where tenant demand is rising, infrastructure investment is flowing, and gross yields are significantly more attractive.
So, where should investors be looking this year?
What Defines a Property Hotspot in 2025?
A true investment hotspot in today’s market combines the following:
- Strong rental demand (from professionals, students, or families)
- High gross yields (ideally 6%+)
- Regeneration or infrastructure projects that will drive price growth
- Undersupply of quality housing, leading to upward pressure on rents
- Good transport links and proximity to city centres, universities, or major employers
We’ve analysed market data, yield trends, and development activity to bring you a snapshot of the top-performing regional cities in 2025.
🏛️ Manchester
- Average gross yield: ~6.5% (rising to 7.5% in key postcodes like M14 and M19)
- Price growth forecast: +5.5% in 2025 (Savills)
- Key driver: £1bn+ city centre regeneration (St John’s, Mayfield, Victoria North)
- Tenant base: Young professionals, students, and build-to-rent tenants
Manchester continues to top the list. With a booming local economy, high graduate retention, and growing job markets in tech, media, and finance, demand for housing remains high. The city also benefits from direct transport links, including HS2 (Phase 2b) planned to reach Manchester Piccadilly.
🏠 Liverpool
- Average gross yield: ~7.2%
- City centre yields: Up to 8.5% in areas like L1 and L6
- Key driver: Liverpool Waters, Knowledge Quarter, Baltic Triangle development
- Tenant base: Students, short-let tourists, young renter
Liverpool’s affordability and high yields continue to draw investors. The city’s regeneration projects, combined with a growing tourism sector and student population, support both long-term and short-term lets. Investors should be mindful of building quality and service charges in certain developments.
🏢 Birmingham
- Average gross yield: ~6.2%
- Price growth forecast: +4.5% in 2025 (JLL)
- Key driver: HS2 Phase One (London to Birmingham), Paradise and Smithfield regeneration
- Tenant base: Graduate renters, BTR schemes, families
Birmingham remains one of the UK’s most investable cities thanks to major infrastructure upgrades, its position as a national transport hub, and strong employment growth. The launch of HS2 will cut journey times to London to 49 minutes, boosting commuter interest.
🏡 Leeds
- Average gross yield: ~6.1%
- University presence: Over 60,000 students across 3 major institutions
- Key driver: South Bank regeneration, city digital hub growth
Leeds is the financial capital of the North and one of the fastest-growing UK cities. Regeneration across the South Bank area and increasing demand from both students and professionals make it a strong play for capital appreciation and yield.
🏛️ Newcastle
- Average gross yield: ~7.0%
- Key driver: Ouseburn Valley redevelopment, high PBSA demand
- Tenant base: Students and young professionals
With a thriving student population and a strong rental market, Newcastle offers excellent yield potential. PBSA opportunities remain especially attractive here, with limited pipeline supply and strong occupancy rates forecast.
📍 Dundee & Glasgow
- Dundee average yield: ~8.4% (one of the UK’s highest)
- Glasgow average yield: ~7.0%
- Key drivers: Waterfront regeneration (Dundee), merchant city expansion (Glasgow)
Scottish cities continue to deliver high returns, albeit with a slightly different legal framework. For yield-focused investors who are comfortable with Scottish tenancy law, Dundee is especially attractive.
🏡 Honourable Mentions: Nottingham, Coventry, Sheffield
- All offer strong university presence, consistent rental demand, and below-national-average property prices.
- Yields in these areas typically range from 6.0% to 7.5% depending on postcode and asset class.
Strategic Takeaways
- North and Midlands cities continue to dominate for cash-flow-focused investors
- Scotland offers some of the UK’s highest yields, particularly in Dundee and parts of Glasgow
- HS2 and major regeneration schemes are critical value drivers
- Investors should focus on fundamentals: affordability, demand, and infrastructure
Conclusion
The shift to the regions is not a trend — it’s the new reality of UK property investing. For investors seeking high yields, growing markets, and lower entry prices, regional cities are leading the way in 2025.
Looking for more detail? Our full 2025 Property Investment Guide launches soon, with deep dives into the cities, sectors and strategies that matter.
📅 Follow us for the launch update, or get in touch if you want city-specific opportunities today.
