Top UK Cities For Property Investors In 2025

The UK property market has long had two very diverse sides: the home of the Capital, the South, known for high prices and tighter margins, and then the more affordable North, with uncapped potential for capital growth and strong yields.

The latest UK House Price Index of May 2025, by Hometrack, is making one thing crystal clear; that savvy investors looking to maximise their returns are saying goodbye to the Southern options, and heading North - with Manchester and Newcastle leading the way.

How is the Property Market Reshaping?

After a few difficult years, the UK housing market is going through a very obvious rebound, with sales agreed in May 2025 clocking in at 6% higher than 12 months prior - which is the highest post-Easter sales levels we've seen in over four years.

Alongside lower mortgage rates, and affordability testing being more relaxed - allowing buyers to borrow up to 20% more than before - there is also more stock on the market, with a reported 13% year-on-year increase in homes on the market, boosting buyer activity as well as investor confidence.

This buzz is much stronger in the North West, with the South suffering with slow growth and oversupply.

Newcastle: The North East's Strongest Performer

Newcastle is often overlooked in the investor world, but with the average house price clocking in at £158,600 with a year-on-year growth of 2.7% - up from 1.7% in 2024.

This 1% growth in annual price inflation shows the developing confidence in the North East market, and with the recent surge across the city of Newcastle in infrastructure development, including Metro system updates and green urban planning iniciatives, the city is becoming more and more appealing to renters and homeowners alike.

The affordability is a huge factor in this city, with house prices well below the national average, it offers investors a low entry point with unspoken potential for capital appreciation as the city continues to grow.

Manchester: The Heart of the North West Investment Market

Manchester has long been known as the most desirable investment spot across the UK, and this is not about to change. With the average house price sitting at £230,800, and year-on-year price growth coming in at 2.5%, the relative value that Manchester offers is unmatched when compared with competing cities.

Offering a unique and desirable combination of economic dynamism, cultural appeal, and employment opportunities, Manchester benefits from tech booms, huge student populations from its major university presence, and media giants including the BBC and ITV.

Demand continues to outpace supply in this Northern city, with only 3% more homes on the market compared to this time last year. This further supports stronger price growth, and ensures a competitive bidding market, especially on the best-located turnkey properties.

Why should I choose the North?

The North has been unbeatable as an investment opportunity, and this is only becoming more obvious as their market heats up as the southern market cools. If you're looking for a reliable, futureproof investment that balances affordability, growth, and resiliance, the North is the home of your next investment.