Authored by the expert who managed and guided the team behind the United Kingdom Property Pack
Everything you need to know before buying real estate is included in our United Kingdom Property Pack
As we reach mid-2025, the UK property market presents a mixed landscape of opportunities and challenges.
With house prices rising by 1.6% annually and mortgage rates gradually declining from their peak, buyers are returning to the market in increasing numbers. The key question for both investors and home seekers is: where exactly should you focus your property search?
If you want to go deeper, you can check our pack of documents related to the real estate market in the United Kingdom, based on reliable facts and data, not opinions or rumors.
The UK property market in June 2025 offers distinct opportunities depending on your goals - northern cities like Manchester, Liverpool, and Nottingham provide exceptional yields and growth potential for investors.
For lifestyle seekers, places like Saffron Walden, Chelmsford, and Leeds combine affordability with quality of life, while expensive southern markets, particularly London, require caution as signs of correction are evident.
| City | Average Property Price | Average Rental Yield | Best For | Monthly Rent Range |
|---|---|---|---|---|
| Sunderland | £120,000 | 8.5% | Investment (highest yields) | £650-£800 |
| Liverpool | £163,384 | 7.4% | Investment & living | £700-£900 |
| Manchester | £250,000-£280,000 | 7.4% | Investment & living | £900-£1,200 |
| Nottingham | £220,000-£250,000 | Up to 10% | Investment (students/medical) | £800-£1,000 |
| Glasgow | £185,573 | 7.25% | Investment (students) | £700-£900 |
| Leeds | £243,456 | 6-7% | Living & investment | £850-£1,100 |
| Birmingham | £283,733 | 6-7% | Capital growth | £900-£1,300 |
| London | £661,444 | 3.6-4% | Long-term capital appreciation | £1,800-£2,500 |
Fact-checked and reviewed by our local expert
Laurence Rapp 🇬🇧
Sales representative at Spot Blue - International Real Estate Agency
What are the best cities in the UK to buy property right now, and what makes each one strong or weak?
Manchester stands out as the UK's property investment powerhouse in June 2025, offering rental yields averaging 7.4% with some postcodes like M14 reaching an exceptional 12%.
The city's strengths include major regeneration projects, a thriving job market powered by tech and financial services, and excellent transport links including the expanding Metrolink system. Manchester benefits from significant infrastructure investments, including the upcoming HS2 connection and the Victoria North development, which will add 15,000 new homes. The main weakness is increasing competition among buyers, which is pushing prices up rapidly and reducing the availability of prime investment properties.
Liverpool delivers consistent 7.4% rental yields with property prices averaging £163,384, making it one of the most affordable major investment cities. The city benefits from a £14 billion regeneration project including Liverpool Waters, new film studios attracting major productions, and Everton FC's new stadium at Bramley-Moore Dock. The student population of 63,000 creates strong rental demand, particularly in areas like L4 which offers yields up to 7.8%. The weakness is slower capital growth compared to southern cities, though this is offset by higher rental returns.
Nottingham offers the highest potential yields at up to 10%, particularly around its two universities and Queen's Medical Centre, with property prices remaining affordable at £220,000-£250,000. The city's strengths include a massive student population of over 60,000, creating consistent rental demand, and the ongoing Broadmarsh redevelopment project transforming the city centre. Postcodes like NG7 and NG1 are particularly attractive for investors seeking maximum returns. The main drawback is lower long-term capital appreciation compared to larger cities, making it better suited for income-focused investors than those seeking capital growth.
It's something we develop in our United Kingdom property pack.
What's the average property price in these major cities, and how affordable are they?
The UK property market in June 2025 shows stark regional differences, with northern cities offering significantly better value than their southern counterparts.
Sunderland leads as the most affordable major city with properties averaging just £110,000-£120,000, making it accessible for first-time investors and offering exceptional value with 8.5% rental yields. Hull follows closely at £160,000-£180,000, while Liverpool (£163,384), Glasgow (£185,573), and Nottingham (£220,000-£250,000) complete the list of most affordable investment opportunities. These northern powerhouses offer entry points at 50-70% below London prices while delivering superior rental returns.
The Midlands and North present a middle ground with Leeds averaging £243,456, Manchester ranging from £250,000-£280,000, and Birmingham at £283,733. These cities combine reasonable affordability with strong economic fundamentals, major employers, and ongoing regeneration projects. They represent the sweet spot for investors seeking both rental income and capital growth potential without the prohibitive entry costs of southern markets.
Southern cities remain significantly less affordable, with Bristol commanding £350,000-£400,000 for average properties and London sitting at an eye-watering £661,444. For context, the UK average house price stands at £268,250 as of June 2025, meaning London properties cost 2.5 times the national average. This pricing disparity has created a clear north-south divide, with investors increasingly looking northward for better value and returns.
Which UK areas are up-and-coming right now, and what's driving the interest?
Bradford, Hull, and Middlesbrough are experiencing renewed investor interest with yields exceeding 7% and very low entry prices, making them attractive for cash-flow focused investors.
These cities benefit from significant regeneration funding, with Bradford receiving £500 million for city centre transformation and Hull continuing its City of Culture legacy investments. Improved transport links, including better connections to Leeds and Manchester, are driving demand from commuters seeking affordable alternatives. The overflow effect from expensive neighboring cities means professionals are increasingly willing to commute for the significant cost savings these locations offer.
Leicester and Newport are seeing significant price growth driven by infrastructure improvements and local economic development. Leicester benefits from its strategic location between Birmingham and London, with journey times to both under 90 minutes, while its Space Park development is attracting high-tech industries. Newport gains from the removal of the Severn Bridge tolls, making it an attractive option for Cardiff commuters, and benefits from £1.2 billion of regeneration investment including a new convention centre and transport hub.
Saffron Walden and Chelmsford in Essex are attracting families and London commuters seeking quality of life without the capital's price tags. Saffron Walden was named the best place to live in the UK for 2025, offering historic charm, outstanding schools achieving above-average results, and a strong community spirit. Chelmsford benefits from 35-minute trains to London Liverpool Street and significant new developments including Beaulieu Park, which will add 3,600 new homes. Both locations offer the perfect balance of countryside living with city accessibility.
It's something we develop in our United Kingdom property pack.
Which places are declining or stagnating, and why should buyers avoid them?
Central London areas including the City of London, Camden, and Westminster show concerning signs with properties above £700,000, yields around 3.5%, and falling buyer demand.
Properties in these prime London postcodes are taking significantly longer to sell, with average time on market exceeding 100 days compared to the national average of 77 days. Many sellers are reducing asking prices by 5-10% to attract buyers, indicating a clear shift in market dynamics. International buyer interest, traditionally supporting these markets, has waned significantly due to high stamp duty costs and uncertainty around potential wealth taxes. The exodus of financial services jobs post-Brexit continues to impact demand in traditional banker neighborhoods.
Expensive commuter belt areas in West Essex and Bromley face similar challenges with high entry costs averaging £500,000-£600,000, low yields often below 4%, and reduced rental demand growth. The premium previously paid for London proximity is diminishing as hybrid working reduces commuting frequency, with many professionals only traveling to offices 2-3 days per week. These areas are experiencing increased supply as families relocate to more affordable regions, creating downward price pressure.
Aberdeen continues to underperform due to reduced investment in the oil and gas sector, with the transition to renewable energy not yet compensating for traditional industry decline. Property prices have stagnated for several years, with some areas seeing actual declines of 5-10%. The city's over-reliance on a single industry makes it vulnerable to sector-specific downturns, and the current energy transition creates uncertainty about future employment levels. Warning signs include properties staying on market over 100 days, multiple price reductions, and declining population as workers relocate to other energy hubs.
Are any cities showing signs of a housing bubble that might burst?
London and the South East display classic bubble characteristics in June 2025, with prices remaining at historic highs despite weakening demand and deteriorating affordability metrics.
Prime Central London appears particularly vulnerable with some postcodes seeing 9% price declines over five years, while properties in areas like Kensington and Chelsea regularly sit on the market for 150+ days. The combination of high stamp duty costs (often exceeding £50,000 on typical properties), potential wealth taxes being discussed by the government, and changing work patterns with professionals no longer needing daily office access creates significant downward pressure. International investor retreat is accelerating, with data showing foreign purchases down 40% from pre-pandemic levels.
Key bubble indicators present include price-to-income ratios exceeding 10x in London (compared to the healthy 4-5x range), rental yields below 3.5% in many prime areas making buy-to-let unviable, and mortgage payments significantly exceeding rental costs by 30-40%. The market shows increasing time on market averaging 77 days nationally but over 100 days in expensive southern areas, and rising inventory levels with 13% more homes for sale than in 2024, indicating sellers rushing to exit before further declines.
Cornwall and other pandemic hotspots that saw dramatic 20-30% price increases during COVID-19 are experiencing corrections as demand normalizes. Second-home taxes and restrictions are dampening investor interest, while the return to office work reduces demand for remote working locations. Areas like Padstow and St Ives, which saw unprecedented demand in 2020-2021, now have properties sitting unsold for months with sellers forced to accept offers 10-15% below asking prices.
Where's best if I want to live in the property myself, considering lifestyle and amenities?
Saffron Walden takes the crown as the UK's best place to live in 2025, offering exceptional schools, historic charm, and easy access to London via 60-minute trains.
| Location | Key Strengths | Average Price | Who It Suits |
|---|---|---|---|
| Saffron Walden | Best overall 2025, historic charm, top schools | £400,000-£500,000 | Families, London commuters |
| Chelmsford | Excellent transport, new developments, schools | £350,000-£450,000 | Young professionals, families |
| Manchester | Urban amenities, nightlife, jobs, culture | £250,000-£280,000 | Young professionals, graduates |
| Leeds | Cultural scene, green spaces, city amenities | £243,456 | Professionals, families |
| Bristol | Creative hub, harbourside living, festivals | £350,000-£400,000 | Creative professionals |
| Edinburgh | Historic beauty, festivals, education | £350,000-£450,000 | Professionals, culture lovers |
| York | Heritage, schools, community, transport | £340,000-£420,000 | Families, retirees |
These locations excel in providing comprehensive lifestyle benefits including excellent transport links with all having direct rail connections and nearby airports, diverse job markets not dependent on single industries, outstanding schools and universities for families, and rich cultural offerings including theatres, museums, restaurants, and festivals. Each offers abundant green spaces with parks and countryside access within 30 minutes, active local communities, and low crime rates making them ideal for different life stages and preferences.
Which cities offer the best rental yields, and what monthly income can I expect?
Nottingham leads the UK rental yield rankings with returns up to 10%, particularly in postcodes NG7 and NG1 near the universities, generating £800-£1,000 monthly rent.
Top performing cities for rental yields include Sunderland at 8.5% yield with £650-£800 monthly rents, offering the best entry-level investment opportunity, and Hull at 7.3% yield generating £600-£800 monthly, benefiting from regeneration investments. Liverpool and Manchester both deliver 7.4% yields with rents of £700-£900 and £900-£1,200 respectively, combining strong returns with economic growth. Glasgow offers 7.25% yields with £700-£900 rents, particularly strong in student areas like G52 achieving 9.3% yields.
High-performing postcodes worth targeting include M14 Manchester with an exceptional 12% yield (highest in UK), driven by proximity to universities and hospitals, and NE4/NE6 Newcastle offering 8-8.5% yields in established rental areas. For a typical £200,000 investment property, investors can expect £1,333+ monthly income in high-yield areas (8%+), £1,000-£1,333 monthly in medium-yield areas (6-8%), and £667-£1,000 monthly in low-yield areas (4-6%).
Remember to factor in costs including management fees (8-12% of rent), maintenance (typically 10% of annual rent), void periods (4-8 weeks annually), and insurance (£200-£400 annually). After all costs, net yields typically run 1.5-2% below gross yields, still providing attractive returns compared to traditional investments.
What types of tenants typically rent in high-yield areas, and what do they want?
Student-dominated markets form the backbone of high-yield areas, with Nottingham leading at 60% student tenancy from its two major universities housing over 60,000 students.
Glasgow follows with 55% students and recent graduates, benefiting from multiple universities including Glasgow University and Strathclyde. Manchester and Liverpool show more diverse tenant mixes, with Manchester splitting 40% students and 40% young professionals, while Liverpool's 63,000 student enrollment creates 45% student tenancy. These markets offer predictable demand cycles aligned with academic years and benefit from parental guarantors reducing default risks.
Professional markets are growing in cities like Leeds where 60% of tenants work in finance and legal sectors, demanding higher-specification properties near business districts. Birmingham shows 55% professional tenancy with 30% families, reflecting its diverse economy, while Manchester city centre attracts 70% young professionals seeking urban lifestyle amenities. Mixed markets like Sunderland (50/50 students and professionals) and Hull (40% students, 35% professionals, 25% families) offer diversification benefits.
Tenant requirements vary significantly by demographic. Students prioritize walking distance to campus (under 20 minutes), all-inclusive bills, high-speed broadband (minimum 100Mbps), furnished accommodation, and secure bike storage. Young professionals demand city centre locations or excellent transport links, dedicated home office space, modern kitchens and bathrooms, parking spaces, and gym facilities. Families seek good school catchment areas, gardens or outdoor space, minimum 3 bedrooms, safe neighborhoods, and ample storage space.
It's something we develop in our United Kingdom property pack.
Where should I buy if I want to resell at a higher value, and what's the growth forecast?
Manchester and Birmingham lead capital growth forecasts with projected 17-20% appreciation over 2025-2028, driven by major infrastructure investments and economic expansion.
| City | Forecast Growth | Current Avg Price | Key Growth Drivers |
|---|---|---|---|
| Manchester | 17-20% | £250,000-£280,000 | Regeneration, job growth, transport |
| Birmingham | 17-20% | £283,733 | HS2, Commonwealth Games legacy |
| Leeds | 15-18% | £243,456 | Financial sector growth, regeneration |
| Edinburgh | 15-18% | £350,000-£450,000 | Tech sector, limited supply |
| Bristol | 15-17% | £350,000-£400,000 | Tech/creative sectors, housing shortage |
| Liverpool | 12-15% | £163,384 | Major regeneration, affordability |
Despite current challenges, London historically delivers the strongest long-term capital appreciation, with properties purchased during market corrections often seeing significant gains over 10-year periods. Transport corridor cities along the HS2 route (Birmingham, Manchester, Leeds) should see sustained growth as journey times to London reduce dramatically post-2030, creating new commuter markets and attracting businesses seeking lower costs with maintained connectivity.
Successful capital growth strategies include buying in regeneration areas before completion to capture uplift, focusing on transport improvements like new stations or HS2 connections, targeting cities with growing employment sectors particularly tech and green energy, looking for supply-constrained markets where planning restrictions limit new builds, and considering Brexit-resilient cities with strong domestic growth drivers rather than international dependency.
What local economic or infrastructure factors will affect property values in 2025 and beyond?
HS2's impact on Birmingham, Manchester, and Leeds will be transformative, cutting journey times to London by 30-50% and creating an estimated 10-15% property premium within one mile of stations.
Major regeneration schemes are reshaping city landscapes, with Liverpool Waters' £5.5 billion waterfront transformation creating 9,000 homes and 17,000 jobs, while Manchester's Victoria North will add 15,000 new homes across 155 hectares. Nottingham's Broadmarsh redevelopment is revitalizing the city centre with new retail, leisure, and residential space, and Leeds South Bank's major mixed-use regeneration will create a new business district. These projects typically drive 15-20% price increases in surrounding areas during construction phases.
Transport improvements including Manchester Metrolink expansion adding new lines to Trafford Park and the airport, West Yorkshire's new mass transit system connecting Leeds, Bradford, and surrounding towns, and Edinburgh tram extensions reaching Newhaven and potentially Granton will significantly impact property values. CrossRail 2 planning, though delayed, maintains long-term potential for Surrey and South London markets.
Economic factors present both opportunities and risks. Positive drivers include government department relocations creating 22,000 jobs outside London in cities like Leeds and Birmingham, tech sector growth in Manchester, Leeds, and Edinburgh attracting high-earning professionals, green energy investments in the North East and Scotland creating new employment hubs, and university expansions nationwide increasing student accommodation demand. Risk factors include retail sector decline affecting town centres, office-to-residential conversions changing city dynamics, climate change flood risks requiring careful due diligence, and energy efficiency requirements mandating EPC C ratings by 2030.
How do property taxes and ongoing costs compare across the UK?
Council tax varies significantly across the UK, with Edinburgh topping the list at £2,456 annually (£205 monthly) for Band D properties, while London averages a more moderate £1,982 (£165 monthly).
| Location | Annual Council Tax | Monthly Cost |
|---|---|---|
| London | £1,982 | £165 |
| Manchester | £2,134 | £178 |
| Birmingham | £2,156 | £180 |
| Liverpool | £2,234 | £186 |
| Leeds | £2,267 | £189 |
| Edinburgh | £2,456 | £205 |
| England Average | £2,280 | £190 |
Stamp duty land tax rates from April 2025 show first-time buyers paying 0% up to £300,000 (reduced from £425,000), then 5% on portions between £300,001-£925,000. Other buyers face 0% up to £250,000, then 5% on £250,001-£925,000, with rates increasing to 10% and 12% on higher brackets. Second homes and buy-to-let properties incur an additional 3% surcharge across all bands, significantly impacting investment property costs.
Typical annual running costs for a £250,000 property include council tax (£2,000-£2,500), buildings insurance (£300-£500), maintenance (£2,500-£3,000), ground rent if leasehold (£200-£500), and service charges if flat (£1,000-£3,000), totaling £6,000-£9,500 annually. Hidden regional costs include London's higher service charges (£2,000-£5,000 for flats), Scotland's different LBTT tax system with progressive rates, coastal areas' higher insurance premiums due to flood risk, and listed buildings requiring specialist insurance and maintenance at 20-30% above standard costs.
Is it better to buy now or wait in different areas, based on current trends?
Northern cities including Manchester, Liverpool, Leeds, and Birmingham present compelling "buy now" opportunities as mortgage rates decline while strong rental demand continues supporting yields.
These markets are experiencing 3-5% annual price growth with regeneration projects gaining momentum and creating future value. With mortgage rates expected to fall from current levels to 3.75% by end-2025, buying now locks in properties before further price increases while still benefiting from future rate reductions through remortgaging. Strong rental demand means properties in these areas often achieve positive cash flow immediately, making them attractive for investors seeking income.
High-yield investment areas like Sunderland, Hull, and Nottingham offer exceptional immediate returns with yields compensating for higher current borrowing costs. Limited supply in these markets is pushing rents higher, while regeneration projects remain in early stages offering potential for capital growth. Up-and-coming areas including Leicester, Newport, and Bradford are still affordable with significant growth potential as infrastructure improvements are underway but not yet reflected in prices.
London and the South East warrant a "wait and watch" approach with prices stagnating or falling in prime areas and high stamp duty burdens reducing net returns. Better value is emerging as sellers reduce prices by 5-10%, suggesting waiting 6-12 months could yield better deals. Expensive commuter towns face similar dynamics as work-from-home patterns reduce location premiums, with increasing supply as people relocate creating a buyer's market. Market timing factors supporting immediate purchase include spring/summer traditionally seeing price increases and limited housing supply supporting prices, while reasons to wait include economic uncertainty potentially creating better deals and more properties coming to market increasing choice and negotiating power.
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We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UK versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The UK property market in June 2025 offers distinct opportunities depending on your goals, with northern cities like Manchester, Liverpool, and Nottingham providing exceptional yields and growth potential for investors.
Success in 2025's property market requires careful location selection and realistic pricing expectations, with the winners being those who recognize that the UK property market is increasingly fragmented, offering the best combination of yields, affordability, and growth potential in the north.
Sources
- Joseph Mews - UK Property Investment Guide
- Zoopla House Price Index
- Track Capital - UK Buy-to-Let Yield Map
- Advantage Investment - Best UK Cities for Property Investment
- Flettons - Top 10 Emerging UK Property Locations
- Clifton Private Finance - UK House Price Predictions
- Residential Estates - May 2025 UK Housing Market Outlook
- Buy Association Group - Housing Demand in UK Cities
- The Telegraph - UK Housing Market Analysis
- Time Out - UK's Best Places to Live 2025
- Homebuilding - Best Places to Live in UK 2025
- Togetha - Top Cities for Rental Yield 2025
- Pauzible - High Rental Yield Cities BTL Investment
- HomeLet Rental Index
- PropertyData - Best UK Areas for Capital Growth 2025
- CBRE - UK Real Estate Market Outlook 2025
- Morningstar - UK House Price Outlook 2025
- UK Government - Council Tax Levels 2025-2026
- Yield Investing - Best Housing Prices in UK
- Knight Frank - UK Housing Market Forecast May 2025