Best Places to Invest in UK Property 2022  

There’s never been a better time to invest in UK property. Low interest rates, the Stamp Duty holiday and the increasing potential of key regional areas have created a market where a number of diverse locations are worthy of being called the best place to invest.

For those interested in where to invest money in the UK, this raises several important questions. Firstly, where are the best places to invest in UK property in 2022? Furthermore, if you’re identifying where to invest, what should you be looking for?

Where are the best UK Buy-to-Let property investments?

 When we talk about the best places to invest in UK property 2022, there’s a number of factors to consider. While some of these are obvious, it’s important to get a clear idea of what makes a good Buy-to-Let investment before we jump in. Key metrics we look at are:

Property Prices – Rental Yields – Tenant Demand – Population – Regeneration – Career Opportunities – Tenant Demographics – BTL Opportunities – Transport Links

This allows us to build a complete picture of the best place to invest in property in the UK, while also highlighting emerging towns and cities that might not be traditional options for investment. For buyers, understanding these metrics is a great way of figuring out where to consider for a property investment in the UK.

UK house prices have risen at their fastest rate in over seven years – increasing by 10.9% compared to this time last year – highlighting the power that property investment in the UK can have for investors.

Birmingham

Average Property Price: £214,696
Average Rental Yield: 6.56%
Price Growth in Five Years: 17.44%

Birmingham remains a clear contender for the best city to invest in Buy-to-Let property, continuing a run of form that started in 2016. As more projects within the Big City Plan come to fruition, demand has never been higher for the second city – just as preparations for the Commonwealth Games 2022 come online. Savills predict that Birmingham will be in one of the fastest growing regions over the next five years, forecasting price rises of 24% by 2025.

One of the biggest advantages Birmingham holds is its affordability. Knight Frank research shows that the average income to average property price ratio is much better in Birmingham than across the wider UK – the city is attracting and retaining skilled workers that have the income to spend in this rapidly growing city.

Average rents have risen by 30% over the last 10 years and are expected to rise by 12% over the next five, boosted by tenant demand from young professionals leaving London and a rising population set to hit 1.24 million by 2030.

With a market largely made up of one and two-bedroom apartments – at least in the increasingly popular city centre location – rental yields are averaging above 6% for property investors in these asset types, while a solid development pipeline is delivering new standards of quality such as St Martin’s Place.

Finally, some of the strongest connectivity foundations in the UK are being improved with new transport links. The Midlands Metro expansion continues to offer unprecedented access to emerging West Midlands destinations while work has begun on HS2 – a generational development that will revolutionise Birmingham.

Manchester

Manchester

Average Property Price: £208,792
Average Rental Yield: 6.53%
Price Growth in Five Years: 20.69%

Manchester continues to be the northern powerhouse it was originally hyped to be – establishing itself as one of the most exciting locations for investment.

With some of the best capital appreciation returns on this list over the last five years – including a huge rise between 2017 and 2018 – Manchester has led the way for price growth in the North.

Future growth looks set to continue the trend, with property prices expected to rise by 28% according to Savills revised forecasts. This can largely be attributed to the city’s rapidly growing economy and population, which have both made incredible strides over the last few years.

Across the lettings sector, Manchester remains a clear alternative to London. With a host of career opportunities in global businesses and employment growth of 84% between 2002 and 2015, the city is now the top destination for young professionals in the North West and only beaten out by Midlands destinations such as Birmingham according to Hamptons International.

In terms of future development, the Great North Rail project is expected to come into effect by 2022 and will allow 40,000 more passengers to travel throughout key cities in the North – increasing tourism for Manchester significantly.

Derby

Derby

Average Property Price: £222,910
Average Rental Yield: 4.20%
Price Growth in Five Years: 11.37%

A major city within the East Midlands, Derby is at the very heart of the UK, bridging the gap between the North and the South. While it’s not as well-known as some of the big hitters in the UK, it’s building the foundations to compete as the best city to invest in Buy-to-Let property in the country.

As one of the most well connected cities in the UK, it’s no surprise that Derby has 17 prestigious universities within one hour of travel. As well as having a strong student presence, 48% of the entire population is under 35 – a major demographic of the so-called ‘Generation Rent’. The HS2 interchange will only drive this connectivity further, putting Derby within an hours catchment of the capital, while reducing the commutes to Birmingham, Leeds and York to 35 minutes or under.

The driving force behind Derby’s youthful population is its employment opportunities, both existing and those yet to come. Not only have the past three years seen 4,500 jobs created across the professional and manufacturing industries, but the ambitious 2030 Derby City Master Plan is set to introduce at least 4,000 more.

While it’s a relatively new addition to the best places to invest in UK property in 2022, with strong past performance and a promising future, Derby represents a key city in a fast growing East Midlands region. As its regeneration schemes drive more employees to the city, property prices have the potential to rise by 24% by 2025.

Find out more about the East Midlands.

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Nottingham

Nottingham

Average Property Price: £230,522
Average Rental Yield: 4.92%
Price Growth in Five Years: 19.26%

A ‘sleeper hit’ for the UK property market, Nottingham has been making huge strides over the last few years and now represents a key investment area.

More affordable than other major cities such as Manchester, Nottingham offered quality yields of around 9% in several city centre postcodes including NG1 (the city centre) and NG7 (the surrounding area which also includes the University of Nottingham) in 2019, although that has slowed since lockdown to an average yield of 4.92%.

Nottingham’s major strength is in its past capital growth and future long-term yield growth, which is set to be one of the strongest in the country according to JLL.

Driven by two major UK universities located relatively close to the city centre, there is a huge amount of tenant demand supporting these yields, alongside a booming creative quarter that is serving the growing graduate pool.

Nottingham is also home to Queens Medical Centre – a ‘super hospital’ in the region and one of the largest teaching hospitals in the country, with over 6,000 medical staff adding to the growing demand for accommodation.

Newcastle

Newcastle

Average Property Price: £215,355
Average Rental Yield: 5.23%
Price Growth in Five Years: 8.26%

The 8th largest city in the UK by population, Newcastle is one of the most affordable locations on this list and thus, driving some of the best rental yields in the UK.

While postcodes such as NE1 and NE2 are offering high yields (around 6 – 7%) at the heart of the city and the average yield sitting at 5.23%, Newcastle has faced challenges in terms of capital growth over the last five years.

That said, Newcastle has one of the best graduate retention rates in the country and is recognised as one of the fastest growing regions for new start-up businesses. This will likely boost demand from young professionals, which will in turn increase rental prices and thus, yields.

Hosting a variety of corporate headquarters, as well as strong education and digital sectors, there is an established standard of career opportunities that assist with driving this demand while supporting the entrepreneurial side of the city.

Leeds

Leeds

Average Property Price: £232,617
Average Rental Yield: 5.76%
Price Growth in Five Years: 15.30%

Another major force in the North, Leeds has quickly become recognised as a key city for investors seeking long-term rental returns and a definitive entry in our best places to invest in UK property in 2022.

Home to 800,000 people, 73% of the households in Leeds are currently renting, making this a dream for investors looking for consistent tenant demand.

While capital growth has been minimal compared to others on this list, rental demand in Leeds is gaining momentum quickly. JLL predicts that Yorkshire will see growth of 28% over the next five years, driven by the aforementioned demand as well as a number of Build-to-Rent schemes being delivered.

Economically, Leeds is one of the fastest growing in the country and now rivals several European cities. This is having a huge impact on the opportunities available within the city, enticing nearly 10% of those leaving London annually since 2018.

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  • Locations forecasting price growth between 19% and 24% by 2025
  • Achieving rental yields up to 6%
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Edinburgh

edinburgh

Average Property Price: £316,791
Average Rental Yield: 5.35%
Price Growth in Five Years: 17.65%

Edinburgh remains a stalwart of the best places to invest in the UK due to its excellent price growth over the last decade.

While prices going up have lowered rental yields somewhat, Edinburgh still remains desirable with tenants, ensuring less turnover in an investment property.

Savills also predicts that Edinburgh’s economy will continue to rise, positively impacting property prices to the tune of 24.4% over the next five years – the third highest growth rate of any UK region.

In terms of future development, there has been an influx of new-build city centre apartment opportunities across the multifamily (build to rent) and private rented sector, despite pressure from alternative markets such as student housing.

Bracknell

Bracknell

Average Property Price: £377,945
Average Rental Yield: 5.48%
Price Growth in Five Years: 2.96%

With London still struggling to recover, a number of key towns in the South East have taken the limelight, offering more affordability and still delivering connectivity with the capital.

Bracknell is one of these towns. Home to a number of globally renowned businesses such as Dell, Microsoft and 3M, it’s also experiencing the kind of large-scale regeneration that attracts incredible demand.

This new town has seen price rises of 249% over the last 20 years and is still nearly half the price of the average London property, ensuring higher yields – 5.48% in Bracknell versus 2.90% in London.

Furthermore, a £770 million regeneration plan is impacting property prices positively, contributing to Savills forecasting rises of 19.1% on average over the next five years.

For investors interested in targeting the young, commuting professional demographic near London, Bracknell represents the opportunity to take advantage of long-term growth and consistent yields.

Sheffield

Sheffield

Average Property Price: £215,203
Average Rental Yield: 4.45%
Price Growth in Five Years: 14.54%

Last year we mentioned that Sheffield was at the start of its property cycle and showing incredible potential. This year we see Sheffield start to achieve that potential, particularly in terms of delivering rental yields for investors.

Thanks to around £480 million being spent on developing Sheffield’s shopping district, Sheffield’s local authority continues to create the amenities to deal with rising demand. This has directly impacted central postcodes such as S1 where yields have hit around 7%.

Sheffield has also been one of the top markets coming out of lockdown, where sales were up 20% higher than at the start of the year according to Zoopla.

Glasgow

Glasgow

Average Property Price: £204,007
Average Rental Yield: 5.31%
Price Growth in Five Years: 17.01%

While Glasgow property has always been in the shadow of Edinburgh, the second city of Scotland is starting to emerge.

Glasgow’s economy is set to perform on par with Edinburgh over the next five years and its property market demonstrates this.

Sale prices are expected to rise by 24.4% over the next five years, while rental growth is expected to rise by 10.5% over the same period. This follows five years of excellent capital appreciation and will be welcome news for investors looking to Scotland.

With a solid development pipeline of 4,000 purpose-built rental homes and ‘multifamily’ schemes, the parts are in place to support Glasgow Council’s recent commitment to double the city centre population by 2030.

Liverpool

Liverpool

Average Property Price: £188,948
Average Rental Yield: 4.82%
Price Growth in Five Years: 17.03%

Liverpool remains a clear contender for best place to invest in property 2022 due to the rental yields it can provide. While price growth has been weaker over the last five years than some other alternatives, Liverpool boasts some of the highest performing rental yield postcodes in the country.

L1, commonly known as the Baltic Triangle, is one of Liverpool’s trendiest places to live and has delivered 8.1% annually in the past. Across the city, L7 hosts the Royal Liverpool University Hospital and has been known to deliver annual rental yields of 10%.

JLL predict that property prices in Liverpool will rise by 28% over the next four years, benefitting from the same growth as Manchester.

Liverpool also has an excellent income to house price ratio at 4.9, which highlights its affordability when measured against the strength of its workforce.

In terms of regeneration, the Liverpool Waters scheme will be one of the most impactful for the city – a £5 billion, 30-year plan aimed at delivering new spaces, bringing in more tourism and creating nearly 17,000 new jobs.

Best Areas for UK Property Capital Gains

For those that want to invest in property for capital gains, these are the best areas for property price growth:

 

City Property Prices Growth Last 5 Yrs Growth Next 5 Yrs Growth Last 12 Mnths
Birmingham £214,696 17.44% 24.0% 2.78%
Manchester £208,792 20.96% 28.0% 1.55%
Nottingham £230,522 19.26% 24.0% 1.08%
Liverpool £188,948 17.03% 28.0% 3.13%
Edinburgh £316,791 17.65% 24.4% 2.43%
Glasgow £204,007 17.01% 24.4% 5.42%

 

Source: Zoopla, JLL

 

Here we can see the true impact of London’s decline and how regional markets have steadily become the best places to invest in UK property 2022. While the North West is leading the way in future predictions, they haven’t seen the most immediate growth on the list, highlighting their position as long-term alternatives within the best places to invest in UK Property 2022.

Following close behind is Birmingham and Nottingham, representing the Midlands. While these cities are more expensive then the North West, they’ve seen good growth over the last five years and Birmingham in particular has shone over the last 12 months.

Finally, Glasgow has seen the best growth over the last year as an affordable alternative within Scotland. With the second highest growth on the list over the next five years, Glasgow represents a clear opportunity for long-term growth, although it isn’t as well connected with the wider country as some others on this list.

Best Areas for UK Property Rental Yields

For those that want to invest in property for rental income, these are the best areas for property rental yields:

 

City Property Prices Current Yield Est. Rent Growth (’25)
Birmingham £214,696 6.56% 12.0%
Manchester £208,792 6.53% 12.5%
Leeds £232,617 5.76% 10.5%
Bracknell £377,945 5.48% 9.0%
Edinburgh £316,791 5.35% 12.0%
Glasgow £204,007 5.31% 10.5%

 

As you’d expect, some of the more affordable locations on this list are delivering the best rental yields. Birmingham, Manchester and Leeds are some of the more affordable locations, with the two biggest cities achieving yields above 6% on average.

Bracknell is punching well above its weight, delivering yields above 5% despite being in one of the most expensive markets in the UK. This is largely down to its exceptional rents thanks to a high standard of living and new amenities attracting ambitious new residents.

Scotland continues to be a top destination for returns, with Glasgow and Edinburgh offering excellent long-term yields at different price points for investors.

Investment FAQ’s

Can I buy property in the UK as a foreigner? Plus Icon

The short answer is, yes. Overseas buyers can purchase UK property even if they do not live in the UK, although there are several considerations to take into account.

Buying UK property is always much easier if the investor is a cash buyer, as this circumvents the need to apply for a mortgage or take on additional borrowing.

In terms of lending, a growing number of British mortgage lenders are more likely to lend against a property if the recipient intends to use it for Buy-to-Let. While in the past this was typically provided by more specialist lenders, as the trend has taken hold we’ve seen a much broader range of products across the board.

This means that in the normal market, expat mortgages are also more common – provided you’re dealing with a specialist lender. It’s always best to shop around the market to ensure you’re getting the best product for you.

Investing in the UK also has a number of unique elements and costs that need to be considered, such as Stamp Duty Land Tax and other specific tax implications.

Can non-residents get a mortgage in the UK? Plus Icon

There’s a common misconception that non-residents can’t get mortgages in the UK but the opposite is true. Non-residents can freely get mortgages for a UK property, although it can be a longer process than domestic buyers.

In terms of securing finance, many international investors will benefit from the wider outlook that a specialist partner can offer over mainstream organisations – offering better interest rates and more favourable terms.

The biggest difference between applying for a domestic or international mortgage as a UK resident and a non-resident is, as expected, the time it takes to complete the process. While domestic investors could potentially complete the process in a month between application and completion, international investors will generally take a little longer – between 2 and 3 months on average.

As confidence in the market grows, specialist lenders will also usually start offering more ‘suitable’ expat mortgages, typically delivered as interest-only with specific rates and conditions.

How long does buying a property in the UK take? Plus Icon

Buying a property in the UK can vary – it all depends on how long your search takes, the type of property you’re looking to buy and how long the administration process takes.

For example, provided the process goes as smoothly as possible, MoneySavingExpert predicts that the process could take up to 14 weeks. This accounts for:

  • Finding the property, researching the area and putting an offer in: 6 weeks
  • Legal matters, surveying and exchange: 4 weeks
  • Completion, exchange of contracts, keys and deeds: 4 weeks

Now take Off-Plan Property as an example. Due to the nature of the purchase, this will typically take a lot longer as the property has to be built beforehand. While this offers unique benefits, it obviously means the process is spread over a wider timeframe. With Off-Plan purchases from overseas, buyers will typically exchange contracts well in advance of completion, depending on build times, with completion and handover coming much later. Good developers supporting international or overseas purchases will support clients with mortgage applications ready for completion, guiding them through the process at each step.

If you are purchasing completed developments delays can usually be mitigated by performing due diligence and research prior to each stage of the process. By having the right partners in place, buyers can make the entire process more efficient, especially important for overseas investors that will be investing remotely. Remember that the UK has strict anti-money laundering (AML) requirements so getting basics ready such as Proof of Identification, Proof of Address and Proof of Funds ready in advance can be really helpful in speeding up the process.

Can I attain residency through buying property in the UK? Plus Icon

No, owning a property in the UK does not provide residency. If you do not have right of residence in the UK you can only use the property as an investment or a holiday residence – this means you can stay there for as long as your passport or visa permits.

While EU residents had the right to reside until Brexit, this does not constitute residency, which is a completely separate process for international investors.

Has Brexit affected the UK market? Plus Icon

Brexit has played a huge part in the wider UK market since the vote in 2016. After half a decade of incredible growth for the South, the Brexit vote appeared to flip the script – the popular London market declined and regional cities in the Midlands and across the Commuter Belt saw broad increases.

This has meant over the last four years, Birmingham has led the way for UK growth and thrived as an affordable market, despite rising uncertainty.

The situation appeared to come to a head at the start of December last year, as the announcement of a General Election (GE) and continued Brexit uncertainty created a much more volatile market. That said, since the results of GE 2019 and the adoption of a firm Brexit stance, UK property has enjoyed a ‘Boris-Bounce’, with prices increasing and regional cities continuing to forecast exceptional growth.

While the Coronavirus pandemic largely overshadowed any Brexit impact, the initiatives put in place by the Government have largely sustained the market over the short-term.

Over the long-term, it’s difficult to say how Brexit may affect the market but right now UK property outperforming many other sectors.

Is Slough still a good place to invest in property? Plus Icon

While London property continues to experience a slow recovery, Slough property remains a clear investment opportunity.

The South East has gone from strength-to-strength over the last 10 years and experienced some of the highest price growth in the country. Even now, it’s forecasting increases of 19.1% by 2025.

One of the major positives for the town is the affordability it can provide investors looking to purchase in the South East. It’s nearly half the price of London and is delivering much better yields.

As London’s price growth starts to gather pace, commuter towns may not be in the spotlight as much as they are now. That said, Slough is still a good place to invest in property if you’re looking for long-term potential going forward.

This growth will mainly be driven by regeneration such as Crossrail, which will revolutionise travel in the region and allow for many more commuters to use the line.

Is Bracknell a good place to invest in property? Plus Icon

While London has long been a common hotspot for Buy-to-Let investors, the rise of the South East is making commuter towns, such as Bracknell, more lucrative investment locations.

In comparison to the capital, property prices across Bracknell are relatively affordable – £377,945 vs. £648,942.

That said, the town’s ongoing regeneration schemes are set to boost property prices in the coming years. According to Savills, prices could see up to 19.1% growth by 2025, which for investors would equate to significant capital growth.

Where are the best UK property markets? Plus Icon

For the most part, the best property locations are dependent on what you want to achieve. If you’re looking for a long-term investment that offers affordability and future growth, you’ll want to consider an area with plenty of upcoming regeneration such as Digbeth in Birmingham. You can find a full range of our market forecasts here that may meet your investment goals and strategies.