Which City Has the Best Graduate Salary in the UK?
One of the key demographics in any economy is the graduates – the university leavers who become the young professionals of tomorrow. Graduates have a huge impact on a city’s economy while also being a major factor for the local property market and business sector.
Typically attracted by the employment opportunities available at larger businesses, as well as the lifestyle that a city can offer, graduates and young professionals are generally key contributors to the rising demand for rental properties in an area.
For buy-to-let investors, then, finding an area that is attracting graduates is a savvy investment strategy. An easy way to do this is to identify the cities that offer a competitive graduate salary in the UK, host top businesses and are building new amenities.
With this in mind, we’re looking at the best graduate salaries in the UK and which cities are leading the way for attracting graduates.
Birmingham
Average Graduate Salary: £30,059
There are many reasons why Birmingham is known as the UK’s second city, one of them being its employment opportunities. This West Midlands engine has always been an attractive alternative to London, with its growing collection of employers and affordable living costs making it a hotspot for both graduates and investors.
Birmingham has been on an upward trajectory for the best part of 10 years and has since become an integral part of the UK economy. With the likes of PwC, HSBC, Goldman Sachs and Deloitte contributing more than 206,000 jobs to the local jobs market, as well as impressive graduate schemes, it’s no surprise that almost 50% of Birmingham’s entire population is under 29.
There are several incentives that draw young professionals to the second city – the £30,059 average graduate salary being one of them. It’s no secret that London ranks favourably for the best graduate salary in the UK, but with the cost of living averaging 87% more than Birmingham, the second city offers much better value for money, meaning the population of young professionals will likely only increase.
Derby
Average Graduate Salary: £32,450
Not many investors – or graduates – know it but Derby offers the highest graduate salary outside of the capital in England. The city is also incredibly popular for graduates around the country, with 46% of university leavers relocating to Derby for its employment opportunities. The manufacturing sector has always been the city’s biggest industry, bolstered by a plethora of global companies, although it’s now rapidly being matched by a rising number of progressive digital businesses.
Housing Rolls Royce, Bombardier Transportation and Toyota, these businesses attract thousands of graduates each year and funnel thousands of pounds into the local economy. From apprenticeships to graduate schemes, Derby’s manufacturing industry alone contributes 45,000 jobs to the city. With endless opportunities for progression, Derby’s £32,450 average graduate salary is a glimpse of what young professionals can achieve in the city.
Derby’s position as the UK’s most central city has only contributed to its popularity as a graduate hotspot. With a rail catchment of over 800,000 and links to the UK’s biggest cities, workers from neighbouring East Midlands hubs commute to Derby to take advantage of its high salaries and employment opportunities.
Related: 7 Things You Don’t Know About Derby
London
Average Graduate Salary: £33,466
As the capital city and with such a high cost of living, it’s understandable that London has the highest graduate salary in the UK. Naturally, this is also accompanied by the strongest graduate retention rate in the country, which currently stands at 67%. With the majority of global companies choosing London for their national headquarters, these opportunities have long been driving the city’s student and graduate population.
In the eyes of students and graduates, London is so much more than just a place to live and work – it’s a lifestyle. From the unique neighbourhoods to its strong city core, the culture of London is one of the key reasons graduates flock to the city.
It’s no secret that the abundance of employers and job opportunities is a significant driver behind the city’s exceptional graduate salary, but one of the main reasons is the cost of living in the capital. The average cost of living in London is now surpassing £2,500, which inevitably requires higher salaries to compensate for this.
Leicester
Average Graduate Salary: £24,420
As we’ve already highlighted with Derby, East Midlands cities are hidden gems, and Leicester is no exception. While the city is most commonly known for its connections to King Richard III, it is quickly becoming more popular for its culture and the strength of its universities.
In NatWest’s 2020 Student Living Index, Leicester ranked amongst the top three student cities in the UK, in good company with Manchester and Cambridge. Bolstered by more than 32,000 businesses, the city’s healthy economy is retaining and maintaining more graduates each year.
A graduate retention scheme worth £1.6 million was launched in 2020. The project saw De Montfort University, the University of Leicester and Leicester City Council work together to secure funding for a range of six-week internships at local businesses.
Newcastle
Average Graduate Salary: £27,020
Newcastle is not only a key university spot for UK students, but it is also one of the most popular destinations for international students. Considered a Northern powerhouse, Newcastle’s Northern charm attracts more than 5,000 international students each year, many of whom go on to stay in the city.
Retaining graduates is crucial for the continued growth of a city, and with Newcastle boasting a 38% graduate retention rate, it is set to continue on an upward trajectory. The growth of Newcastle is just one reason why graduates are choosing to stay in the city, with its employment opportunities being another.
According to statistics, Newcastle has one of the fastest-growing tech sectors in the UK, not to mention its position as the 8th fastest-growing city in the country. Providing more than 1,300 job opportunities in the tech industry alone, Newcastle is averaging a graduate salary of £27,020 – a competitive graduate salary in the UK.
Nottingham
Average Graduate Salary: £32,732
The East Midlands is full of investment hotspots, and amongst the likes of Derby and Leicester, you’ll find Nottingham. While this regional city is often overshadowed by its Northern counterparts, it offers one of the best graduate salaries in the UK. Standing at £32,732, Nottingham attracts – and retains – thousands of university students each year.
The incentive for prospective students lies mostly in it’s reputation. In a recent report by QS Top Universities, Nottingham scooped up 9th spot for the best student cities in the UK and ranked 53rd in the world. With endless amenities, opportunities for work experience and internships, the city’s competitive graduate salary is an added bonus.
The graduate salary is one of many reasons why students choose to stay in Nottingham upon graduation – housing satisfaction being another. According to Knight Frank, 83% of students who lived in privately rented properties during their studies were happy with their accommodation. As a testament to Nottingham’s wider rental market, it’s no surprise that more investors are choosing the East Midlands.
Related: Why Invest in East Midlands Property in 2022?
Edinburgh
Average Graduate Salary: £34,157
In England you’ll find London and in Scotland you’ll find Edinburgh – another capital city. Naturally, Edinburgh has the second-highest GVA per resident amongst the UK’s major cities, sitting comfortably behind London. The city’s impressive economy has long been driven by its collection of global companies, with the likes of EY, Deloitte and Amazon having offices in this Scottish powerhouse.
With six different universities across the entire city, we’re not only seeing more graduates stay in Edinburgh to take advantage of these employment opportunities, but this growing demographic of young professionals is drawing more businesses to Edinburgh. As a result, this is stimulating further economic growth across the city.
Edinburgh’s profile is on the rise, which continues to be reflected in the city’s average graduate salary. Standing at £34,157, this is one of the best graduate salaries in the UK.
| Region | Average Graduate Salary |
| Birmingham | £30,059 |
| Manchester | £30,464 |
| Derby | £32,450 |
| Liverpool | £33,049 |
| Leeds | £33,476 |
| Nottingham | £32,732 |
| London | £33,466 |
| Glasgow | £50,582 |
| Newcastle | £27,020 |
| Leicester | £24,420 |
| Bristol | £25,476 |
| Edinburgh | £34,157 |
| Sheffield | £32,781 |
Graduates are the young professionals of tomorrow, and with this thriving demographic comes increasing rental demand. It’s no secret that tenant demand is the key to a successful buy-to-let, so graduate salaries are an important consideration for investors. Young professionals look for several different things in a location, but a competitive graduate salary is arguably the most important.
While major cities, including London and Edinburgh, will always dominate the ranks for the best graduate salary in the UK, the likes of Derby and Birmingham are attractive alternatives. With more affordable living costs and an average salary of up to £29,000 in Derby, it offers one of the best graduate salaries in the UK, which is only going to increase in the coming years.
Read Our FAQ’s
Why should buy-to-let investors target cities with high graduate populations?
Graduates and young professionals are a primary driver of rental demand. Typically, they prioritise flexibility and lifestyle, making them long-term renters rather than immediate homeowners. Investing in “graduate hotspots” ensures a consistent pipeline of high-quality tenants and lower void periods.
Which UK city offers the highest graduate salary outside of London?
Glasgow currently holds the title for the highest graduate salary in England outside of London, with an average of £50,582. This is largely driven by a combination of high-demand industry concentration, strong university-employer links, and a high rate of graduate retention.
Is London still the best place for graduate property investment?
While London offers the highest average salary (£33,466) and the best retention rate (67%), it comes with significantly higher entry costs for investors. Many are now looking at “Second Cities” like Birmingham, where the cost of living is roughly 87% lower than in London, but the young professional population is booming.
What is “Graduate Retention” and why does it matter?
Graduate retention is the percentage of students who choose to stay and work in the city where they studied. A high retention rate, like Edinburgh’s or Newcastle’s (38%), indicates a healthy local economy and a self-sustaining rental market that doesn’t rely solely on newcomers.
Which industries are driving graduate growth in Northern England?
The North is seeing a massive surge in the tech and digital sectors. Newcastle, for instance, is one of the UK’s fastest-growing tech hubs, providing over 1,300 niche job opportunities that attract both domestic and international talent.