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Best Place To Invest In Property In The UK
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Where is the best place to invest in property in the UK? This is a common question among investors across the country. Whether you’re new to property investment or expanding your portfolio, choosing the right location is everything. With so many options, it can be difficult to know what type of property to invest in and where — but this is where we step in to help.
To find out the best place to invest in property in the UK, the average cost of homes in the area, and what to consider before your investment, continue reading.
Why Invest in Property in the UK?
Investing in property can be beneficial for many reasons:
- Property investment provides regular cash flow through rental income from tenants
- Properties tend to increase in value over time
- 14% more contributors in the rental market said tenant demand went up than said it went down (according to the UK Residential Market Survey)
- Property is often deemed as less volatile compared to the stock market
- Property can help diversify your investment portfolio and protect your wealth
Understanding Rental Yields and Capital Growth
There are two key areas to consider when it comes to finding the best place to invest in property in the UK — rental yields and capital growth.
- Rental yields – The annual rental income expressed as a percentage of the property’s purchase price. It helps you, as an investor, gauge the potential return on your investment property. It’s important to understand rental yield to evaluate the ongoing return from rental income relative to the property’s cost.
Rental yield example:
If property prices are £200,000 and generate £10,000 in annual rental income, the rental yield is 5%.
- Capital growth – The profit you make when you sell a property for more than you paid for it, indicating the potential appreciation amount over time.
Capital growth example:
If you buy a property for an average price of £300,000 and sell it for £350,000, your capital gain is £50,000.
Top UK Property Investment Locations 2026
A good gross rental yield is typically between 5% and 8%.
According to Zoopla, the top cities for rental yields in the UK in 2026 are all in Northern England or Scotland:
City | Average Gross Rental Yield | Average Monthly Rent | Average Buy-to-Let Property Price |
Sunderland | 9.3% | £659 | £84,924 |
Aberdeen | 8.3% | £734 | £106,170 |
Burnley | 8.2% | £634 | £92,473 |
Dundee | 8.1% | £809 | £119,569 |
Middlesbrough | 8.1% | £665 | £98,697 |
Hull | 8% | £669 | £99,819 |
Blackburn | 7.9% | £756 | £114,527 |
Glasgow | 7.8% | £1,012 | £154,945 |
Grimsby | 7.7% | £675 | £104,837 |
Liverpool | 7.7% | £870 | £136,045 |
(Based on data from March 2026).
Sunderland currently takes the top spot for the best place to invest in property in the UK if you’re looking for high rental yield and low buy-to-let property prices.
However, rental yield alone doesn’t determine the best location for property investment. Leading cities such as Liverpool, Manchester, and London remain among some of the most attractive options for investors due to their local economies, amenities, growing populations, and housing demand.
Ultimately, the best place to invest in property depends on your goals and whether you’re prioritising rental income, capital growth, or long-term stability.
5 Types of Properties to Consider Investing in
Once you have a better understanding of the best place to invest in property in the UK, you will need to consider the types of property worth investing in:
1. Traditional buy-to-let – Purchasing residential properties to rent out to tenants. It’s proven to be a popular investment for its steady income and capital appreciation.
2. Student accommodation – Specific accommodation for students, typically in towns and cities where demand is high. Investing in student housing offers high rental yields and repeat occupancy rates.
3. Houses in Multiple Occupation (HMOs) – Renting out individual rooms within a property to multiple tenants at once. Although HMOs can maximise rental income and reduce void periods, regulations can be more complex than regular rentals.
4. Holiday homes – Properties used for holiday rental, business travel, or as a non-permanent place of residence. While holiday rentals, such as Airbnbs, offer high income during peak seasons, they often require more management, have a more competitive market, and potential for void periods.
5. Off-plan – Properties sold before being built, such as new build homes. If the property’s value increases, it presents capital growth, but the process can pose development risks and delays.
Factors to Consider When Choosing Where to Invest
Finding the best place to invest in property in the UK is only worthwhile if you consider some essential factors:
- The location and its neighbourhood value
- The crime rate of the area via Police UK
- Property taxes to determine profitability
- The local job market and whether it’ll attract rental appeal
- Nearby education hubs to attract families
- Future development plans that may increase property value
Start Your Investment Journey With Us
At Peninsular Property, we have over three decades of experience in helping investors find the best place to invest in property in the UK to strengthen their investment portfolios.
We offer support and guidance across Merseyside – a place with strong rental demand, education hubs, and a growing workforce. From market research to overall property management, our team are here to support you throughout.
Whether you’re looking to invest in properties for the first time or want to expand your portfolio, we can help.
To start your investment journey today and learn more about the best locations to consider, contact our highly experienced team.
FAQs
According to an article by Money Week, earlier in the year, leading lenders and estate agents expected house prices to increase between 1% and 3%, but forecasts now range from growth of around 1% to 2% to slight declines in some areas. This period of slower growth may reduce competition and provide more time to secure the right property in the best location.
As of March 2026, Sunderland performs strongly in terms of rental yield. However, rental yield alone doesn’t determine where the best place is to invest in property. The best place for you to invest depends on your goals, circumstances, and financial priorities.
The best property for first-time investors is traditional buy-to-lets. They offer straightforward entry into property investment with manageable risks, especially if you focus on desirable locations and good rental demand.
The most profitable property types often include HMOs, student accommodations, and commercial real estate. These properties can yield high rental returns and benefit from strong demand. However, profitability depends on market conditions, location, and effective management, meaning thorough research and planning are essential to maximise returns.
Buy-to-let remains a popular investment due to its potential for steady rental income and capital appreciation. However, it requires careful management and market research.
