Property investment can bring returns from the property’s increase in value over time or income from tenants.
But deciding where in the UK to invest in is far more challenging.
Each local market has unique challenges and opportunities.
Read on for guidance on where to invest in property in 2025.
Which cities currently have rising property prices?
The major city in the UK that has seen the greatest rise in house prices is Belfast. Properties there have gone up by 5.5%.
Other major urban areas ranking near the top of this list include:
- Manchester
- Glasgow
- Liverpool
- Leeds.
Which regions currently have rising property prices?
Some regions in the UK have experienced much greater house price rises than others. According to figures from Zoopla, this varies as follows:
- Northern Ireland: +5.7%
- Scotland: +2.4%
- North West England: +2.3%
- North East England: +2%
- Yorkshire and the Humber: +2%
- West Midlands: +1.7%
- Wales: +1.6%
- East Midlands: +0.7%
- London: +0.6%
- South West England: 0%
- South East England: -0.1%
- East of England: -0.3%
There are plenty of specific towns where the growth rate has exceeded the region’s average.
For example, Elgin and Tenby have gone up by 7% and 5% respectively.
Where are property prices currently declining?
There are also plenty of locations that have fallen short of regional trends.
Examples include Chelsea and Richmond, which have decreased by around 18% each.
Meanwhile, on the other end, both Portsmouth and Aberdeen have seen house prices go down this year, at -0.3% and -1.2% respectively.
Which areas have the best rental yield?
Data shows that the areas with the best rental yield are:
- The north-east of England
- The north-west of England
- Scotland.
This indicates how much profit a property owner can expect to make.
Which cities have the best rental yield?
In a recent 12-month period, the locations with the best rental yield were as follows:
- Sunderland: 8.96%
- Aberdeen: 8.03%
- Burnley: 8%
- Dundee: 7.96%
- Glasgow: 7.95%
- Middlesbrough: 7.92%
- Blackburn: 7.52%
- Hull: 7.45%
- Newcastle: 7.45%
- Liverpool: 7.44%
Meanwhile, southern cities tend to have much higher house prices, decreasing the gross yield for buy-to-let properties.
Current worst rental yields
The locations with the worst rental yield include:
- Cambridge
- Oxford
- London
- Southend
- York
- Brighton.
Should I invest in an urban or rural area?
This depends on several factors.
Local market conditions
Each location has its unique property market, which can impact whether investing there is a good idea.
Do your research on selling prices in the specific locations you’re looking at.
Property types & budget
You usually find more detached houses in rural areas, which are pricier. If you’re on a limited budget, this can be challenging.
But if you’ve got a larger budget, you can afford to buy it and then rent out for a larger per-month figure.
On the other hand, urban areas have more small studios and one-bedroom flats. If you’re limited with your budget, this can be ideal.
You’ll find more of these types of properties in the city, and thus your negotiating power goes up compared to just one flat in a rural area that everyone’s competing for.
Types of buyers
Consider the type of buyer you want to attract. Young students and newlyweds are more common in major cities.
Whereas in the countryside, you’ll find a higher age demographic of the ‘typical’ resident.
Which type of property should I invest in?
According to Zoopla, some types of property have seen a nationwide growth in value over the past year. While others have gone down.
In a recent twelve-month period, terraced houses increased in value by 0.8% across the UK. And semi-detached properties went up by 0.7%.
Yet during this same time, flats and maisonettes decreased in value by 1.1%. And detached properties have gone down by 0.5%.
Some experts suggest that the latter two property types will bounce back in 2025. The same applies to semi-detached houses.
You should consider the local market for guidance on which type will have the most interested buyers.
Age demographics of buyers
For example, in rural areas, the average age is 45.9 years, which falls to 38 in cities.
Older people often have larger budgets and are thus usually more interested in detached homes.
Whereas younger people can often only afford flats and small terraced houses.
Speak to a local estate agent about which property type has sold fastest in your area. This demonstrates interest from buyers in your location.
Will house prices go up in 2025?
Most experts think house prices will increase across the UK in 2025. This is largely in response to interest rates, which are predicted to come down.
As one example, Knight Frank forecasts UK house prices will rise 4% in 2025.
This growth is expected to continue throughout 2026 and 2027, as well. Savills is another estate agency with optimistic predictions for 2025.
Remember that each local market is different, so the figure growth (or not) near you can vary. Speak to a local property expert for more guidance.
