Why Invest in Derby Buy-to-Let Property in 2025?

For property investors, Derby presents a compelling Buy-to-Let opportunity. As the UK’s most central city, it remains notably affordable compared to national averages, yet offers high growth potential in both property values and rental income. Derby is an accessible entry point into property investment.

The city’s ambitious regeneration efforts, supported by over £3 billion already invested and a further £3.5 billion anticipated through the 2030 Masterplan, are creating new amenities and infrastructure, significantly boosting demand.

This heightened demand is reflected in strong market performance. Average property prices in Derby increased by 3.7% in the year to February 2025 and have seen a notable rise of 28% over the past five years. Crucially for BTL investors, rental yields are attractive, with average rents increasing by 12.2% in the year to March 2025, higher than the East Midlands average. Specific postcode areas in Derby are reporting yields as high as 6%, positioning the city as a key Buy-to-Let hotspot.

Furthermore, Derby’s growing population, including a projected increase in the 18-24 age group, contributes to a robust tenant pool. The ongoing development of new amenities and infrastructure further enhances the city’s desirability as a place to live, work, and visit, underpinning the positive forecasts for continued growth in both property values and rental income.

Derby, a city honouring its industrial past, is rapidly regenerating into a vibrant cultural and economic centre. Significant investments are transforming the city, including the £45.8 million new performance venue, Valliant Live, and a £25 million refurbishment of the historic Market Hall. These projects, alongside developments like the £100 million Castleward scheme delivering hundreds of new homes, are enhancing Derby’s appeal and driving property market growth.

Recent data shows Derby’s property market is performing strongly, with average house prices increasing by 3.7% from February 2024 to 2025, and a 32% rise over five years, partly fuelled by regeneration and increasing demand. Rental yields in some areas are notably high (up to 6%), making it a UK buy-to-let hotspot. This regeneration, coupled with growing employment, attracts new residents and is projected to significantly boost visitor numbers (the new performance venue alone is expected to attract an additional 250,000 visitors annually), solidifying Derby’s position as a dynamic and centrally located hub.

FIND OUT MORE: Derby Regeneration Projects

Derby’s strategic position in the East Midlands places it at the heart of the UK, providing excellent connectivity between the North and South. This central location is a significant advantage for businesses and residents alike.

As a key rail hub, Derby boasts a substantial rail catchment area of over 800,000 people, facilitating easy commutes and access to a wide talent pool. Furthermore, with 17 universities located within an hour’s travel, the city benefits from a pipeline of graduates and research opportunities. This strong connectivity not only attracts businesses and inward commuters but also enhances the appeal for transient tenants, making Derby a well-connected and accessible city with clear benefits for investors.

Derby offers compelling employment opportunities, driven by a strong manufacturing heritage and burgeoning new sectors. The city is a major UK hub for aerospace, rail, and automotive industries, home to global leaders like Rolls-Royce, Alstom, and Toyota. These companies form a significant employment base, supported by a highly skilled workforce.

Beyond manufacturing, Derby has a dynamic hi-tech sector and growing creative industries, contributing thousands of jobs and diversifying the economy. The city’s labour market is robust, with an employment rate often above the regional average (79.8% in late 2023). While productivity rankings can vary, Derby’s concentration of innovative businesses and skilled talent underscores its economic vitality. This blend of established strengths and emerging sectors makes Derby an attractive location for investors seeking a city with diverse and resilient employment prospects.