4 Best Cities to Invest in the UK

Brett Alegre-wood
November 30, 2022

Location is everything when starting your UK property investment portfolio. The United Kingdom has many famous historical cities, but four stand out as the best place to invest in the UK. They are excellent for starting your property investment portfolio, establishing passive income for you and your family, and solidifying your estates in the United Kingdom.

But first, you probably have some questions. The experts at Gladfish Property Investment have broken down the four best cities to invest in the United Kingdom into manageable, bite-sized information to help you make an informed and financially beneficial decision. 

Why Should You Invest in Property?

The best place to invest is in the UK due to its consistent growth, economic stability, and the rule of law. Across the board, London, Liverpool, Manchester, and Birmingham have seen consistent market growth over the last five years, ranging between 14% and 17% price growth for UK property investment.

Several cities, such as Liverpool and Manchester, are expanding to rival property hubs like London. New schemes and development plans are guaranteed to bring in new businesses and create jobs that will bring in new tenants for rental properties.

It can seem overwhelming, but the experts at Gladfish Property Investment have compiled a helpful list to show you why you should invest in property, such as buy-to-let or personal estates.

Passive Income

When looking for the best place to invest in the UK, you need to see the rental yield to establish passive income. What is passive income? It is revenue that you do not need to think about, seeping into your bank account from tenants living in your investment properties.

In cities such as Birmingham or Liverpool, the student retention rate is between 31% and 41%, making rental properties prime real estate for fresh graduates. After all, if they have been renting property throughout their university years, they will likely stay there trying to find work.

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Generational Property

Cities such as Liverpool and Manchester have seen steady, consistent growth over the past five years, making them perfect properties to keep throughout the generations. A property in one of these cities, whether a buy-to-let or personal property, retains its value for your children and grandchildren. It will give them places to live, passive income from rental yield, or just a place to escape and enjoy something new! Plenty of Londoners want to ditch the city and slum it with their mates in the Manchester Northern Quarter.

Expanded Property Portfolio

If you want to become a landlord or own multiple properties, it looks fantastic for numerous properties to fill your UK property investment portfolio. Proof of ownership, even prior ownership, of property can repay itself dividends in other investments. It is a confirmed, successful purchase with returns, adding professionalism and credibility to your future endeavours.

After all, people love to see others succeed, especially in places touted as the best place to invest in the UK.

Which City is Best?

Which city is the best place to invest in the UK? It’s a tricky question, as there are several excellent cities–but the most successful and profitable cities are Manchester, Birmingham, London, and Liverpool. All four cities have shown increased and consistent growth, with more planned for several decades.

But what about the finer details?

Birmingham

If you’re looking to buy a house in Birmingham, whether a second home, buy-to-let property or for a loved one, you would be buying the best place to invest in the UK. Birmingham is a mainstay in UK property investment, with prices expected to rise to almost 26% in 2026.

Projected Property Financials

The average property price for Birmingham is between £206,000 and £214,700, with an expected 24% growth over the next five years, having grown by 17% these previous five years. Alongside that, Birmingham has a 5% to 6% rental yield, making your investment sizable compared to other cities, such as Nottingham, which is only a 4% projected rental yield. 

Recent Developments

Birmingham has had recent growth in the last few years, bringing the population to reach 1.24 million by 2030, with most of them being young professionals and tenants looking for affordable housing outside of the other cities in the United Kingdom.

Birmingham has also seen a 30% increase in rental prices due to young university graduates leaving London to work and start businesses in Birmingham. When you buy a house in Birmingham, the profits are more lucrative, as homes that are not in use as often as you hoped can be rented out to several graduates at once, giving guaranteed, passive income through occupancy.

Recap

  • Birmingham is projected to grow to 1.24M by 2030.

  • Birmingham has seen a 30% increase in rental prices.

  • Birmingham is becoming a destination for young professionals.

  • Property values average between £206,000 and £214,700.

  • The average rental yield is between 5% and 6%.

London

What are the best places to invest in London? There are a few, but London is prime for real estate investment. Whether you are looking for a buy-to-let property or a prestigious countryside home, London is one of the best places to invest in, as London is historically rich and financially secure. Many tenants are looking for affordable housing in London, and overseas buyers are desperate to find the best place to invest in the UK for living and work. London is the hub for several points of interest in the United Kingdom and Europe.

Projected Property Financials

The average property price in London is £292,000, which is £36,000 higher than the year before. Although London has had a volatile past year due to Covid and the pandemic, 2022 has proven to be a stable growth year for housing, which is 17% higher than the previous year.

Recent Developments

London has seen consistent growth since the end of the pandemic, with growing pains felt early in 2021 but has subsided in 2022. The best place to invest in London is increasing, leading to high demand from tenants looking for affordable housing.

Recap

  • London will have a stable real estate market in 2022, with projected growth and positive investment internally and abroad.

  • London is rich in history and business, making it ideal for tenants who need access to the central travel hub of the United Kingdom.

  • The current rental yield for London is 4.1%, keeping it in the top 10 places for rental yield.

Manchester

Often considered the “northern powerhouse”, Manchester is poised to take the spot of London as the best place to invest in the UK. It has seen a surge of tenants due to people searching for affordable housing outside of London and has over 100,000 students with a high retention rate–meaning students will stay in the city long after their university years. On top of that, due to recent developments and population growth, Manchester has plenty of off-plan property.

As the city grows, the more off-plan property will be in Manchester, providing new builds and development to make buy-to-let properties and capitalise on the influx of young professionals and recently graduating students.

What are Off-Plan Properties?

Off-plan property in Manchester is a property that is still in development. This means you will receive a plot of land or a section of an apartment before it is built. This guarantees that you will have something ready, and usually, off-plan property in Manchester is a sound investment, as it will be one of the first buy-to-let properties in the area.

Projected Property Financials

Manchester has seen a 21% price growth for rental properties, with an average rental yield between 5% and 7%. The average Manchester property investment is between £208,792 and £292,500, making it one of the most competitive and lucrative UK property investments. 

Recent Developments

Young professionals need buy-to-let properties, as they will need somewhere to live and work. Manchester has seen development in New Islington, where the district has grown exponentially and needs new rental properties to sustain the increased growth. Alongside that, the city has seen an 84% growth in employment, making it a prime destination for young professionals looking for work outside of London and Birmingham.

Recap

  • Manchester has seen large developments over the past decade.

  • Manchester has a high student population and an equal level of retention.

  • The city has seen an 84% growth in employment.

  • Young professionals are choosing Manchester over London for work and affordable housing.

  • Property prices have increased by almost 21% over the last several years.

Liverpool

Some of the best buy-to-let properties available happen to be in Liverpool. Property investment in Liverpool is a no-brainer, as the city has seen a marked increase in population, workforce, and development. The Liverpool Waters scheme expects to create 17,000 new jobs and districts with businesses, offices, and amenities to rival any other city.

Liverpool has a huge student population, with over 70,000 students attending various universities. It also boasts a 31% retention rate, meaning students will stay in Liverpool long after their university years are done and look for work.

Projected Property Financials

Liverpool has seen a 17% price growth over the last five years and maintains a high rental yield per postcode, sitting between 5% and 10%. Liverpool is projected to have a price growth of 28% in the next five years and an average property price between £164,550 and £188,948. Even the humblest property investment in Liverpool can have a high-value rental yield. It is projected to have rental growth of almost 36%.

Recent Developments

The Liverpool Waters scheme is the most extensive development for property investment in Liverpool. It is a 30-year plan to completely transform the city’s northern docks into a world-class, high-quality waterfront with new apartments, neighbourhoods and businesses. It will expand Liverpool’s commercial district, and it is estimated that 600 new homes will be built, with over 17,000 sq.m of office space, hotels, restaurants, and a range of amenities. On top of that, many other districts in Liverpool, such as the city centre, will receive expansion with the Liverpool Waters scheme.

This is one of the most ambitious schemes the city of Liverpool has conducted and is excellent for off-plan property investment in Liverpool as well as beginning property investors. This makes Liverpool one of, if not the best, places to invest in the UK.

Recap

  • Liverpool has begun the Liverpool Waters scheme, expanding the city and creating new properties for investors and tenants.

  • Liverpool has a fantastic student population, with several influential universities.

  • Liverpool maintains a 31% retention rate, making university graduates prime tenants for buy-to-let properties.

  • The city has seen an impressive rental yield across all districts, between and up to 5% and 10%

  • Global location for start-up companies.

  • Expected property growth by almost 36% by 2026.

An Investor vs a Landlord

A property portfolio makes you more than a landlord. It makes you the person responsible for reaping the rental yields of properties you let. The stress of day-to-day management can be someone else’s responsibility. You become an investor and a forward thinker. The experts at Gladfish Property Investment know how to ensure your assets are financially beneficial for your goals and dreams.

Many people dream of the prestige of owning multiple properties, so why not seize the opportunity? Some properties are for vacation, a fun getaway to somewhere new, and can help create a generational estate for you and your family to call your own. Plus, an investor does more with their properties than a landlord.

Gladfish Property Investment has provided property management, portfolio building, and webinars for over twenty years. We have provided excellent aid in buy-to-let properties, off-plan properties, private estates, and market forecasts. If you have any questions for us and want to begin your property investment journey, we encourage you to reach out to us here and learn about our team and our mission.


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