When it comes to investing in property, location is everything.
A great location can lead to higher rental demand from would-be tenants (no more pesky void periods!), increased rental prices (stronger annual yields!), and long-term price growth (better profits upon sale!).
So it’s no wonder buyers are constantly searching up and down the UK for the next hotspot.
But where is the best place to invest in property?
Well, the truth is that there’s no single, definitive “best place”. There are plenty of great options across the country, and the best
for you will depend on your goals, budget, and investment strategy.
However, using exclusive industry data, we have written this guide to determine where the best locations are for:
- High, profitable yields
- Strong, long-term capital appreciation
- Budget-conscious investors
So let’s dig in.
Where’s the best place to invest for rental yields?
If you’re a buy-to-let landlord, the best location is one that can generate a consistent, profitable rental income from your investment property each month.
Rental yield, which is the amount you make in rent each year relative to the property’s value, is the best measure for identifying such a location.
Side note: If you’re wondering how to calculate rental yield, check out our guide.
Now, fortunately, we’ve already done this research for you. Every year, we gather data from thousands of postcodes across the UK to identify trends in rental properties and determine where offers the best returns for buy-to-let investors.
That research is freely available to read in full here:
UK Buy-To-Let Yield Map 2024
But to save you time, we’ll summarise it here:
- At a regional level, Scotland generates a table-topping average rental yield of 6.18%.
- At a city level, Middlesbrough and Newcastle are the joint-best with average yields of 7.33%.
- At a postcode level, there are four equally strong picks. M14 in Manchester, BD1 in Bradford, and NG1 and NG7 in Nottingham all hit average yields of 12%.
So what can you take away from this?
If you’re looking to achieve a profitable yield, you can’t go far wrong with Scotland or the North East at the moment. But if you’re looking for the absolute best yields, you need to drill down to individual postcodes, where yield hotspots in Manchester, Bradford and Nottingham begin to emerge.
Where’s the best place to invest for capital growth?
For some property investors, yields are not as important as capital appreciation (or, more simply, the growth in a property’s value over time).
You may be happy to sit on an unprofitable asset for a few years as long as the payoff is worth it – especially if you already have several money-making rentals.
In that case, the best place to invest will be the location with the strongest increase in average property price.
Although that said, before we dive into the data, please keep in mind that just because a location has seen price growth in the past does not necessarily mean it will in the future, various other factors could impact property values. Nonetheless, it’s a good starting point for further research.
Of course, when it comes to capital growth, most people in the UK know that London, and the surrounding regions, have led the way for decades. However, our data suggests the best place for capital appreciation is not in the South-East, but in the South-West. Specifically, it’s the PL10 postcode in Plymouth…
| Postcode |
Avg Asking Price |
Sales Per Month |
5 Year Price Change |
| PL10 |
£374,595 |
4 |
113% |
| UB1 |
£483,975 |
6 |
100% |
| L5 |
£133,035 |
7 |
81% |
| GU25 |
£1,214,088 |
5 |
79% |
| LL33 |
£284,246 |
4 |
74% |
| SA40 |
£299,584 |
3 |
74% |
| LL58 |
£374,381 |
2 |
70% |
| LA21 |
£528,333 |
2 |
69% |
| M16 |
£294,225 |
13 |
69% |
| TN19 |
£643,487 |
3 |
69% |
These are the top 10 postcodes with the highest growth in average prices over the past five years. PL10 comes out on top, presumably thanks to a surge in demand for South Coast holiday homes post-COVID.
Notably, Wales also does well, with not one but three postcodes in the top 10 – LL33, LL58, and SA40. This matches up well with our previous Yield Map findings (see link above), which found Wales has the strongest increase in property prices across all regions of the UK, on average.
Where’s the best place to invest on a budget?
In our experience, first-time investors tend to have budgets of around £50,000. This is actually a very reasonable amount if you act smartly (here’s our explainer on
investing £50k in property).
However, when budgets are tighter, you need a location that offers exceptional value for money. There are two ways you could go about it:
- Purchase a buy-to-let with a balance between yields (to ensure short-term profit) and long-term growth potential (for a pay-off on sale).
- Purchase a buy-to-sell for a renovation and flip.
The latter isn’t our area of expertise, and there isn’t much data to help us find locations that offer the best returns for flipping.
Our advice would be to stick to areas you’re familiar with and meet the fundamentals future buyers will be looking for (nearby options for transport, schools, amenities, etc). Then, check the local listings. You’re looking for houses with a listing price that is much lower than other recent sales on the same street or estate. This data is freely available on Rightmove and others.
However, we
can lean on data for finding budget-friendly buy-to-let locations.
Let’s say you have a maximum deposit of £50,000. Most
BTL mortgages come with a 75% loan-to-value ratio, meaning you can look for properties worth up to £200,000.
A minimum rental yield of 7% should be enough to cover all
running costs – especially if you opt for an interest-only mortgage.
Meanwhile, the national average change in house prices over the past 5 years is 19%. So anything above 19% would be outpacing everywhere else.
There are 16 locations in the UK that meet these requirements. Ordered from cheapest to most expensive, the best places to invest on a budget are:
| Postcode |
Area |
Avg Property Price |
5 Yr Price Change |
| BD1 |
Bradford |
£63,522 |
35% |
| SR1 |
Sunderland |
£68,221 |
65% |
| DN31 |
North East Lincolnshire |
£78,333 |
21% |
| TS1 |
Middlesbrough |
£83,667 |
36% |
| G52 |
Glasgow |
£108,633 |
29% |
| L4 |
Liverpool |
£116,285 |
39% |
| G32 |
Glasgow |
£125,212 |
23% |
| G51 |
Glasgow |
£131,199 |
42% |
| G31 |
Glasgow |
£145,950 |
32% |
| LS11 |
Leeds |
£151,299 |
29% |
| G20 |
Glasgow |
£157,519 |
22% |
| CF37 |
Rhondda Cynon Taf |
£160,786 |
25% |
| DD1 |
Dundee |
£167,360 |
20% |
| LS2 |
Leeds |
£167,637 |
24% |
| M18 |
Manchester |
£185,024 |
24% |
| NG7 |
Nottingham |
£194,361 |
33% |
Summary
Investing in the UK property market is a strategic decision that hinges on your goals, budget, and risk tolerance.
As we’ve seen above, whether you prioritise strong rental yields, long-term capital appreciation, or budget-conscious choices, the UK has locations that cater to every situation and objective.
Key takeaways:
- For high yields: Scotland and the North East lead the way with excellent average rental yields, but you should delve deeper into specific postcodes for the best results (with Manchester, Bradford, and Nottingham standing out currently). These areas are prime candidates for investors seeking consistent, profitable income from a rental property.
- For capital growth: While London has historically been the leader, our data shows that the South West, particularly Plymouth’s PL10 postcode, and select regions in Wales are currently the top performers for capital appreciation. These locations are ideal for investors focusing on long-term value growth.
- For lower budgets: Investors with lower budgets can still find lucrative opportunities by targeting properties with high yields and growth potential. 16 areas across the UK meet the grade currently, suiting budgets of all levels – from lower-priced Bradford, Lincolnshire and Sunderland to areas at the top range of what we consider affordable (Leeds, Manchester and Nottingham).
In short, in 2024, the best place to invest in property depends on what you aim to achieve. Although we’ve given you some pointers, the best advice we can give you is to always carefully consider the data and align it with your personal strategy, so you can make informed decisions that maximise your returns and build a profitable portfolio.
If you need help with finding a property or evaluating a location, our team can help. We’re a property investment company operating across the UK and Dubai, and we have years of experience working with domestic and foreign investors of all backgrounds and budgets.
Use the form below to get in touch and we’ll reach out to organise a free consultation.
Note: All data in this article was accurate as of August 2024. We will update the article annually with the latest data. 
