Best Places to Invest in UK Property in 2022

This is the best time to invest in property. As low interest rates and a fast-growing market coincide, many investors are considering where to invest in UK property. While buyers consider where to invest money in the UK, we’re exploring their key considerations. Namely, where are the best places to invest in UK property in 2022 and, if you know where to invest, what should you be looking for?

Where to Invest in the UK in 2022?

When we consider the best places to invest in UK property in 2022, we take several important points into account about the location including past performance, current returns and future potential. These can be broken down into several key categories such as property prices, rental yields, tenant demand, transport, employment, population growth and affordability. This highlights several key best places to invest:

BirminghamDerbyLeedsManchesterSheffieldLiverpoolNewcastleLeicesterNottinghamGlasgow

With all of these points considered, we’re able to build out a complete overview of the best property investment areas in the UK. As you’d imagine, this not only highlights traditionally popular areas but exciting, emerging locations that could still offer excellent returns.

Without further ado, here are the best places to invest in property in 2022.

Birmingham

£206,500

Average Property Price

5.30%

Average Rental Yield

24.5%

JLL Price Growth Prediction for 2026

12%

JLL Rental Growth Prediction for 2026

A mainstay within the UK market, Birmingham remains one of the best places to invest in 2022 due to the sheer amount of regeneration, demand and growth it is forecasting. While the Big City Plan continues to revolutionise the city, adding new mixed-use developments and public spaces, Birmingham is forecasting price rises of 24.5% by 2026.

With preparations for the 2022 Commonwealth Games well underway, Birmingham will soon be in the spotlight, attracting increased inward investment and even more potential demand for residential property.

Average rents in Birmingham have risen by 30% over the last 10 years and are expected to rise by 12% over the next five years, driven by several factors:

  • A rising population forecast to hit 1.24 million by 2030
  • Tenant demand from young professionals leaving London for Birmingham’s affordability
  • A 41% graduate retention rate bringing in new young professionals seeking rental accommodation

The Birmingham property investment market is largely made up of one and two-bedroom apartments throughout the city-centre, where rental yields are achieving up to 6%, while a solid residential pipeline is highlighting new standards of living in developments such as Lockside Wharf.

In terms of where to invest, transport links also remain a key factor for Birmingham’s success. Aside from the world-class links from Grand Central and Birmingham International Airport, the second city will also soon be a major hub for HS2 – one of the most exciting infrastructure developments in a generation and a key reason for Birmingham being one of the best areas for property investment in the UK.
 

Best Rental Yields in Birmingham

 

  • B1 (City Centre): 5.73%
  • B5 (Digbeth): 4.86%
  • B6 (Aston): 5.98%
  • B7 (Nechells): 10.87%
  • B42 (Perry Barr): 5.09%
birmingham property prices since 2011
Birmingham: Best Place to Invest in the UK?
  • 100,000 workers in the UK’s largest professional hub outside of London
  • Forecasted property price growth of £50,000 over the next four years
  • 3rd best UK city for bringing in graduates with no prior links to the city
  • Young population – 40% are under-25, a huge demographic seeking rental properties
  • Affordable with an exceptional average income to house price ratio
  • World-class transport links reducing London travel times to 49 minutes

Derby

£180,966

Average Property Price

6.07%

Average Rental Yield

17.5%

JLL Price Growth Prediction for 2026

12%

JLL Rental Growth Prediction for 2026

If you’re asking yourself, why invest in UK property in 2022? Derby may be an easy answer to why you should.

The city at the very heart of the UK, Derby bridges the gap between the North and the South and is one of the leading lights for the East Midlands. Currently undergoing a major regeneration project – the ‘2030 Derby Masterplan’ – that is transforming the local landscape, Derby property price forecasts for 2022 suggest prices could increase by 17.5% over the next four years.

Derby’s exceptional growth is underpinned by its youthful population and above-average connectivity. The city has 17 universities all within an hour’s travel and is home to a student base of 34,000. With around 48% of Derby’s population under-35, there’s a huge amount of potential demand for rental properties, especially considering Derby’s popularity with graduates:

  • 23% of graduates go to University of Derby and stay for work
  • 46% of graduates move to Derby for work
  • Derby has the 7th highest grad wage in the UK – £24,100 (vs UK average of £23,100)

It’s this younger demographic that is driving the success of Derby’s rental market and reinforcing it as one of the best places to invest in UK property in 2022. Rents increased by 8% between 2020 and 2021, the highest in the UK, and this looks set to continue as demand continues to outpace supply – a factor that will no doubt drive rental yields in Derby. 

Aside from its graduate retention, Derby is also driving new demand through its exceptional career opportunities. With several large-scale businesses – including Bombardier, Rolls-Royce and Toyota – contributing over 45,000 jobs to the local economy, there’s a huge amount of working professionals within the market that are helping push prices in a positive direction, helping Derby’s claim as one of the best places to invest in rental property in 2022.
 

Best Rental Yields in Derby

 

  • DE1 (City Centre): 4.31%
  • DE72 (East Derby): 3.59%
  • DE21 (East Derby) : 4.39%
  • DE24 (South Derby): 3.73%
  • DE3 (West Derby): 3.46%
derby property price charts
Derby: Best Place to Invest in the UK?
  • Population set to rise by 53,000 in the next 16 years
  • Predicted property price growth of 17.5% by 2026
  • Highest annual rent increase in the UK between 2020 – 2021
  • One of the most affordable cities in the UK at £180,966
  • 46% of graduates move to Derby for work
  • 6th most productive city in the UK

Leeds

£172,000

Average Property Price

5.27%

Average Rental Yield

21%

JLL Price Growth Prediction for 2026

27.05%

JLL Rental Growth Prediction for 2026

A powerhouse for Yorkshire, Leeds has built itself into one of the best places to invest in UK property in 2022 because of the strong rental returns it can provide. As the second-largest banking and finance sector in the UK, Leeds has a huge pull with professionals in these sectors, which is driving demand for the rental market.

With a population of around 800,000, studies suggest that around 73% of Leeds households are currently renting, making the city a top destination for investors seeking long-term, consistent tenant demand.

Leeds has one of the fastest growing economies in the country and now rivals several larger European cities, which is further enticing working professionals seeking higher salaries. This is reflected in the number of people leaving the capital for the North – nearly 10% of those exiting London have chosen Leeds since 2018, highlighting it as one of the best places to invest in rental property.

Although Leeds’ price growth in the past has been minimal compared to its peers, the market has largely been buoyed by its excellent rental demand. Despite this, JLL predicts that Yorkshire will see property price growth of 28% over the next five years, as its solid foundation of demand comes to fruition.
 

Best Rental Yields in Leeds

 

  • LS1 (City Centre): 7.72%
  • LS6 (Headingley): 7.43%
  • LS2 (City Centre): 7.14%
  • LS18 (Horsforth): 4.01%
  • LS12 (Farsley): 4.64%
leeds property prices since 2011
Leeds: Best Place to Invest in the UK?
  • Population has grown 7x the rate of London in the last 20 years, hitting 151%
  • Demand is overwhelming supply thanks to a 34% rise in employment within the city
  • Forecasted property price growth of 21% by 2026
  • 73% of Leeds households are currently renting
  • Leeds has attracted 10% of London leavers since 2018
  • Huge student population – over 65,000

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Manchester

£232,500

Average Property Price

5.17%

Average Rental Yield

23.5%

JLL Price Growth Prediction for 2026

31.07%

JLL Rental Growth Prediction for 2026

A list of the best places to invest in UK property in 2022 wouldn’t be complete without the addition of Manchester. Manchester’s population is largely driven by its history of capital appreciation – property values have increased by 20.69% over the last five years.

While it doesn’t have the youngest population on this list – a common indicator of rental demand – the average age is 33. Manchester has over 100,000 students and an above-average graduate retention rate, making it a prospective rental hotspot.

The city has also been recognised as a top location for business start-ups alongside Birmingham, with incredible employment opportunities available at multi-million pound regeneration projects such as Spinningfields and MediaCityUK.

Future growth looks set to help Manchester retain its crown as the king of capital appreciation, with property prices expected to rise by 28% over the next four years. This will likely be driven by the city’s rapidly growing economy and population – key metrics when answering: why invest in UK property in 2022?

This has translated to the lettings sector, where Manchester remains a top alternative to London for the North. The city has seen employment growth of 84% between 2002 and 2015, making it a leading destination for young professionals, only beaten by Midlands destinations such as Birmingham.
 

Best Rental Yields in Manchester

 

  • M1 (City Centre): 6.55%
  • M3 (Salford): 6.99%
  • SK1 (Stockport): 5.43%
  • M15 (Greater Manchester): 7.80%
  • M14 (South Manchester): 9.46%
property prices in manchester since 2011
Manchester: Best Place to Invest in the UK?
  • Property prices have increased by 20.69% over the last five years
  • Over 100,000 students live in Manchester and it maintains exceptional graduate retention
  • Large-scale regeneration of key sites increasing quality employment opportunities
  • Highest predicted price growth in the UK at 28%
  • A young population with an average age of 33
  • One of the largest regional economies out of London

Sheffield

£192,362

Average Property Price

4.45%

Average Rental Yield

15%

JLL Price Growth Prediction for 2026

26.40%

JLL Rental Growth Prediction for 2026

Sheffield is a clear contender for investors asking where to invest due to its future potential. The city is currently entering the early stages of its next property cycle and the numbers its delivering are starting to reflect that. As with Leeds, Sheffield’s continued efforts to build itself as a top UK city have paid off, with the city now predicting property price growth of 28% over the next four years.

Around £480 million has been spent on developing Sheffield’s retail sector, showing a commitment to meet the demands of a rising population. For city-centre postcodes such as S1, this has helped develop one of the best places to invest in rental property, with developments achieving rental yields up to 7%.

A strong development pipeline looks set to keep driving this momentum, with numerous projects being planned as part of the ‘Heart of the City’ scheme. This will add to a city that is already overflowing with music venues, entertainment spaces and cultural hotspots. It’s these amenities that support the most exciting areas to invest in property and Sheffield has an excellent foundation to start building on.

Sheffield has also had one of the better starts for property markets coming out of lockdown – sales are up 20% higher than at the start of the year according to Zoopla research and helping build one of the best property investment areas in the UK.
 

Best Rental Yields in Sheffield

 

  • S1 (City Centre): 5.56%
  • S6 (West Sheffield): 4.03%
  • S2 (East Sheffield): 5.20%
  • S60 (Rotherham): 3.46%
  • S3 (North Sheffield): 5.58%
sheffield property prices since 2011
Sheffield: Best Place to Invest in the UK?
  • Property prices predicted to rise by 28% by 2024
  • Heart of the City’ project is creating incredible new public spaces
  • Home to two universities and a diverse student population of 63,000
  • Predicting 70,000 new jobs over the next decade thanks to the Advanced Manufacturing Park
  • £480 million has been invested into the retail and leisure sector so far
  • Rental yields for city-centre postcodes are achieving up to 7%

Liverpool

£164,550

Average Property Price

5.23%

Average Rental Yield

19.5%

JLL Price Growth Prediction for 2026

36.03%

JLL Rental Growth Prediction for 2026

Liverpool remains a clear contender for buyers considering where to invest due to it’s incredible affordability and potential rental returns. City-centre postcodes in Liverpool are delivering some of the best rental yields in the country, while continued regeneration continues to help support rising property prices.

While price growth has been weaker than most on this list, property forecasts suggest that Liverpool could see values rise by 28% over the next four years, which would cement it as one of the top areas to invest in property for capital growth.

L1 and L7 are some of Liverpool’s most popular postcodes and have delivered yields between 8% and 10% over the last decade. This is largely because Liverpool has one of the most affordable property markets but can command exceptional rents because of the amenities and lifestyle it can provide.

This is once again reflected in Liverpool’s income to house price ratio. The city has a workforce earning salaries that are disproportionately higher than its property values, which can be useful for determining potential rental hotspots within the city’s borders.

In terms of regeneration, Liverpool is driving some of the most ambitious projects in the country. Liverpool Waters is one of the most impactful so far and represents a £5 billion investment over 30 years, designed to deliver new spaces, tourism and nearly 17,000 new jobs for the economy.
 

Best Rental Yields in Liverpool

 

  • L7 (Edge Hill): 9.71%
  • L1 (City Centre): 5.43%
  • L11 (Norris Green): 6.58%
  • L6 (Kensington): 5.98%
  • L2 (City Centre North): 5.67%
liverpool property prices since 2011
Liverpool: Best Place to Invest in the UK?
  • Strong UK rental market – delivering between 8% and 10% in top postcodes
  • Forecasting property price growth of 28% over the next four years
  • Large-scale regeneration with projects worth upwards of £5 billion
  • Incredible student destination with over 70,000 in the city alone
  • A global hotspot for business start-ups alongside Birmingham and Manchester
  • World renowned culture hotspots and amenities for residents

Newcastle

£177,877

Average Property Price

5.10%

Average Rental Yield

13.5%

JLL Price Growth Prediction for 2026

12.38%

JLL Rental Growth Prediction for 2026

As one of the most affordable locations on this list and the 8th largest city in the UK when measured by population, Newcastle remains one of the top areas to invest in property because of its incredible graduate retention rate and a growing population.

Newcastle is also one of the best ‘start-up incubators’ in the country, attracting entrepreneurs to set up shop and in turn, attracting young professionals that are looking for employment opportunities. This has had a huge impact on rental prices that will continue to grow alongside demand, contributing to Newcastle being one of the best property investment areas in the UK.

The biggest problem for Newcastle over the last five years has been its challenges in building capital growth. While city-centre postcodes such as NE1 and NE2 have delivered yields between 6% and 7%, property values haven’t reflected this rapid growth.

Home to some major corporate headquarters including Fenwick, Goldsmiths and Greggs, Newcastle is no stranger to housing large-scale, global brands. At the same time, the city is building on a strong education and digital foundation to deliver a standard of career opportunities not seen elsewhere in the region.
 

Best Rental Yields in Newcastle

 

  • NE1 (City Centre): 5.24%
  • NE2 (Jesmond): 4.66%
  • NE3 (Gosforth): 3.14%
  • NE7 (Benton and Longbenton): 7.60%
  • NE6 (East Newcastle): 7.70%
newcastle property prices since 2011
Newcastle: Best Place to Invest in the UK?
  • Forecasting property price growth of 13.5% by 2026
  • City-centre postcodes such as NE1 are delivering yields up to 7%
  • Market-leading start-up incubator for building new businesses and attracting young professionals
  • Home to the headquarters of large national brands – another driver of demand
  • A student population of over 50,000
  • Leading cultural scene for the wider North-East

Leicester

£206,498

Average Property Price

5.31%

Average Rental Yield

17.5%

JLL Price Growth Prediction for 2026

45%

JLL Rental Growth Prediction for 2026

Leicester represents one of the more established ‘emerging’ cities on this list, underpinned by one of the strongest economies in the country driven by an incredible manufacturing sector. This East Midlands city is home to some large-scale UK employers including Walkers, Dunelm and Next, making it a hotspot for career opportunities.

This demand for work is further boosted by the Leicester NHS Trust, one of the busiest trusts in the city and an employer for over 15,000 people. For investors seeking long-term, consistent rental demand, these are all key signposts for success.

Thanks to its location within the East Midlands, Leicester has incredible connectivity with major destinations including Birmingham and London. With Birmingham accessible in 48 minutes and London in 92 minutes, it’s ideal for commuters that want a more affordable lifestyle.

These transport links (and employment opportunities) have fostered an exceptional level of demand that has translated into the local property market. Property prices have rocketed by 45% since 2016 and future predictions suggest that Leicester property could see a further 17.5% by 2026.

While rental yields aren’t the highest on the list, this capital growth makes for a compelling case for investment.
 

Best Rental Yields in Leicester

 

  • LE1 (City Centre): 5.31%
  • LE3 (Glenfield): 5.35%
  • LE4 (North and East Leicester): 4.13%
  • LE2 (Clarendon Park): 3.81%
  • LE5 (Evington): 3.74%
leicester property prices since 2011
Leicester: Best Place to Invest in the UK?
  • One of the UK’s top 10 economies
  • Exceptional connectivity with major UK cities including London
  • Home to major UK headquarters for brands including Walkers and Next
  • Forecasting property price increases of 24%
  • High capital growth over the last five years at 45%
  • A population set to rise by 11% by 2031

Nottingham

£171,762

Average Property Price

4.92%

Average Rental Yield

17.5%

JLL Price Growth Prediction for 2026

35.41%

JLL Rental Growth Prediction for 2026

Nottingham flies under the radar for many ‘best places to invest in UK property 2022’ lists but nevertheless, it has shown tremendous growth over the last five years and is now a key investment hotspot for the East Midlands.

The city’s main strength is it’s high capital growth over the last decade and the potential for long-term yield growth in the future. Home to two major universities relatively close to the city-centre, Nottingham continues to see exceptional tenant demand and a rising creative sector that is attracting waves of graduates from both in and around the city.

Nottingham is also much more affordable than many other locations on this list, which has contributed to market-leading yields in city-centre postcodes including NG1 and NG7. For investors considering an investment targeted at students, Nottingham remains one of the premier locations in the market.

Another major contributor to Nottingham’s rising population is Queens Medical Centre, a ‘super-hospital’ that’s also a leading teaching hospital in the UK and home to over 6,000 medical staff, many of whom are looking for residential accommodation within the city.
 

Best Rental Yields in Nottingham

 

  • NG1 (Sneinton): 7.79%
  • NG9 (Beeston): 6.69%
  • NG2 (West Bridgford): 4.82%
  • NG10 (Long Eaton): 3.91%
  • NG3 (North East Nottingham): 7.26%
nottingham property prices since 2011
Nottingham: Best Place to Invest in the UK?
  • Voted one of the Top 10 Best Places to Live in 2020 by the Sunday Times
  • Predicting property price increases of 17.5% by 2026
  • 70% of the population is of working age in one of the city’s many businesses
  • Market-leading yields of 9% in some city-centre postcodes
  • Massive student population buoyed by two city-centre universities
  • Houses the Queen’s Medical Centre – a ‘super-hospital’ that provides 6,000 jobs to the economy

Glasgow

£162,081

Average Property Price

5.31%

Average Rental Yield

21%

JLL Price Growth Prediction for 2026

36.70%

JLL Rental Growth Prediction for 2026

The Glasgow property market has long played second fiddle to that of Edinburgh but now, we’re starting to see the city stand apart. As Scotland’s most populated city, Glasgow’s affordability and potential for high rental returns makes it an incredibly tempting offer for investment.

With the largest economy in Scotland, Glasgow generates nearly £27 billion every year thanks to a strong industrial and manufacturing foundation, recently boosted by the £118 million new campus for the local university, earning it the nickname of ‘Scotland’s Silicon Valley’ and further demonstrating its potential as one of the best areas to invest in property.

Glasgow is also recognised as a top destination for culture and associated amenities. As one of the first ‘European Capitals of Culture’ in 1990, it has used this momentum to create a thriving cultural scene that features a broad range of museums and art galleries.

In terms of property prices, Glasgow saw a slow start to 2021 but prices have skyrocketed in the year to date and now sit 15.32% higher than they did in 2020 – an incredible achievement largely driven by its business sector and regeneration. For investors, this potential could mean a significant price increase in the future.
 

Best Rental Yields in Glasgow

 

  • G52 (Cardonald): 6.36%
  • G51 (Govan): 7.59%
  • G67 (Cumberland): 4.95%
  • G32 (Shettleston): 5.89%
  • G11 (Thornwood): 4.66%
glasgow property prices since 2011
Glasgow: Best Place to Invest in the UK?
  • One of the UK’s biggest student centres with incredible campus regeneration planned
  • The 4th largest economy in the UK that generates £27 billion a year
  • Property prices have risen by 15.32% since 2020
  • Scotland’s most populated city and incredibly affordable in the UK market
  • Huge cultural scene driven by the ‘1990 European Capital of Culture’ award
  • A solid development pipeline of residential property aiming to double the population by 2030

Best Places to Invest in the UK for Capital Growth

If you’re looking to build capital appreciation, these are the best places to invest in the UK for capital growth:

 

City Property Price Growth Last 5 Yr Growth Next 5 Yr Growth Last 12 Months
Birmingham £209,176 26.49% 24.0% 7.55%
Manchester £203,835 31.07% 28.0% 4.95%
Nottingham £171,762 35.41% 24.0% 8.90%
Liverpool £164,550 36.03% 28.0% 14.55%
Glasgow £162,081 36.70% 24.4% 12.65%

 
Source: Zoopla, JLL
 
Looking at the growth for these specific cities we can truly see the effect that the ‘London Exodus’ has had on regional locations, establishing them as the best places to invest in UK property in 2022.

While the North West has led the way over the last five years and has incredible projections going forward, Birmingham has shown exceptional growth over the last 12 months and remains one of the best property investment areas in the UK for investors that want rental returns and capital appreciation.

The East Midlands is also emerging as a major force for investors, realising its place as a key area to invest in property after seeing market-leading rental increases over the last year. Finally, Glasgow remains an affordable alternative for those looking to Scotland for their next investment – with strong forecasted capital growth.

Best Places to Invest in the UK for Rental Yields

If you’re deciding where to invest based on rental returns, these are the best places to invest in the UK for rental yields:

 

City Property Prices Current Yield Est. Rental Growth (’25)
Birmingham £206,500 5.30% 12.0%
Manchester £232,500 5.17% 13.5%
Leicester £206,498 5.31% 10%
Derby £180,966 6.07% 12%
Liverpool £164,550 5.23% 10.5%

 
Source: PropertyData
 
As you can see, the majority of the top performers are delivering returns above 5%, with Birmingham and Manchester remaining in the list from last year. Affordability in Newcastle and Liverpool are helping their yields deliver closer to 6% but capital growth remains weaker.

The highest in the list is Derby, which is affordable than some of the bigger cities in the list but encouraging higher rents thanks to excellent amenities. Derby also saw the highest annual rent change in the entire UK between 2020 and 2021 with an 8% increase, highlighting the rate at which it’s yield is improving. In 2022, you can expect this number to be much higher, especially as demand and thus rents outstrips its relatively affordable property values.

Where are the Worst Places in the UK for Buy-to-Let?

While some locations are succeeding, some are failing. These are the current worst places to invest in the UK for buy-to-let, largely because of expensive initial outlays and low yields:

 

City Property Prices Current Yield
Kensington/Chelsea £1,450,425 2.1%
Islington £705,047 2.0%
Wokingham £426,274 2.0%
Stratford-upon-Avon £379,732 2.0%
City of London £756,917 1.4%

 
Source: Zoopla, JLL
 
As you can see, London’s increasingly expensive property market has led to reduced returns, especially in central London where average rents are only delivering a 1.4% yield.

This is largely driven by London’s expensive property prices, which saw a huge increase between 2010 and 2016. While that rate of increase has slowed since the Brexit referendum, it’s expected that London will recover over the next four years and start to see accelerated growth once again.

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