Best Places To Invest In 2026

As a property investor, it’s crucial to find out where in the UK is best for investing in property in 2026. Areas with a fast-growing rental market, high demand for housing, recent regeneration projects and high employment levels all create favourable environments for investment – let’s take a look at some of the best places to invest in property in the UK.

Table of Contents

Leeds
Manchester
Liverpool
Birmingham
Luton
Sheffield

*Tip – you can check out our detailed location investment guides here.

Leeds

The fastest growing city in the UK, Leeds, has a population of 3 million across the wider city region, including a growing student population. The key industries include finance and legal services, healthcare, tech and digital, providing a stable economic base that drives sustained demand for housing. Leeds is home to four universities, fuelling the need for student housing, especially close to campuses and the city centre.

Major regeneration initiatives, most notably the South Bank regeneration project are set to expand the city centre and rejuvenate the former industrial area of Holbeck. This long-term regeneration programme proposes the delivery of up to 8,000 new homes and the creation of approximately 35,000 jobs, further boosting employment and population growth. With competitive property prices compared to other major UK cities and consistently strong rental yields, Leeds offers a compelling proposition for property investors, from long-term buy-to-let opportunities to short-term and serviced accommodation.

Manchester

Manchester has the largest city region economy outside of London, with a gross added value (GVA) of £74.85 billion. Major employers like Amazon, Google, Uber, Unilever and the BBC have hubs in Manchester and job opportunities are abundant. More regeneration is planned for Manchester, including the ambitious £1 billion Northern Gateway which will create new neighbourhoods, jobs and green spaces over 155 hectares to the north of the city.

Manchester offers higher rental returns than many other cities with an average of 5.8%, making it an ideal city for property investors. Manchester investors can also enjoy diverse investment opportunities, from city centre apartments and student housing, to revitalised neighbourhoods such as trendy Ancoats and up-and-coming Salford.

Liverpool

Liverpool is a historic shipping port and city of culture, and it boasts the highest rental yields in the country, with an average of 7.92%. Offering comparatively low property prices, even compared to other northern cities like Manchester, with an average sale price of £229,470. Liverpool has benefited from ongoing regeneration and infrastructure projects, including the £ 5.5 billion Liverpool Waters project and recent developments such as the Knowledge Quarter, Ten Streets, and Liverpool Science Park. Liverpool boasts a strong and resilient economy, with major employers including Sony, Bosch, Jaguar Land Rover, AstraZeneca, and Nestlé Health Sciences.

Liverpool also has three major universities and welcomes 70,000 students each year, creating consistent demand for student properties. The city also has a high student retention rate, meaning that many students stay in Liverpool after graduating. Liverpool enjoys a strong tourism industry, which contributes £4.9 billion to the economy each year, so short-term lets are also a popular investment choice.

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Birmingham

The UK’s second-largest city, Birmingham, has become one of the most attractive locations for property investment. Over the past 20 years, the city has delivered substantial capital growth, making it appealing to investors seeking both long-term returns and high short-term rental income. Relatively low property prices combined with high rental yields continue to drive demand.

Birmingham has already benefited from significant regeneration and is set to see even more transformation, including the £1.2 billion Paradise scheme and £1.9 billion Smithfield redevelopment scheduled for early 2026. This flagship project will deliver 3,000 new homes alongside a vibrant cultural quarter. The city is also home to major employers such as Goldman Sachs, HSBC, and BDO, with further firms including EY, MHA, and Atos planning to relocate to the area, fueling growth in the professional workforce and strengthening rental demand.

Historically, Birmingham has faced a persistent undersupply of rental accommodation, particularly within the city centre. With a rapidly growing population and one of the UK’s strongest graduate retention rates, the city is projected to require more new homes than any other UK city by 2040. This ongoing imbalance between housing supply and demand makes for a good opportunity for investors, with strong and sustainable returns forecast.

Luton

Thanks to its strategic location adjacent to London with relatively affordable entry prices, Luton in Bedfordshire is a firm favourite for property investors in 2026. Commuters can be in London within 30 minutes on the train, saving money on house prices and congestion charges. Luton Airport is right on the doorstep too, offering easy travel options plus supporting strong local employment and increasing demand for both long-term and short-term rental accommodation.

Luton has more to offer than proximity to London, however, with the 20-year Luton Investment Framework underway and providing new homes, jobs, infrastructure improvements, education facilities and cultural investment across the town. Luton has established itself as a key employment hub, home to major organisations including aerospace company Leonardo, AstraZeneca, Ernst & Young, airline EasyJet and travel company TUI UK & Ireland.

The town’s population continues to grow, supported by ongoing regeneration and the presence of the University of Bedfordshire, which attracts students, graduates and professionals alike. This sustained growth has placed increasing pressure on housing supply. According to Rightmove, the average house price in Luton was £321,080 over the past year, with typical rental yields ranging between 5% and 7%, making the area attractive to investors seeking a balance of affordability, yield and long-term capital growth.

Sheffield

Known for its rich Northern history and industrial legacy, Sheffield has enjoyed a major transformation in recent years, from a former steel production town to a haven for creatives and young professionals. The city is home to a broad range of industries and major employers, including HSBC, Nationwide, Virgin Media, BT, McLaren, Rolls-Royce, BAE Systems and more. Sheffield is home to first-class institutions such as the University of Sheffield and Sheffield Hallam, welcoming 63,000 students yearly, who are all in need of affordable accommodation within the city.

While property prices in Sheffield have been steadily rising, the city remains one of the most affordable locations in the UK for property investment. This relative affordability, combined with consistently strong rental demand, enables Sheffield to deliver some of the highest rental yields in the region.

Over the past year, average house prices in Sheffield stood at £254,893, while central areas such as the S1 postcode have performed particularly well, ranking among TotallyMoney’s top buy-to-let postcodes with yields of up to 7.57%. With attractive entry prices, robust tenant demand and competitive returns, Sheffield continues to stand out as a strong and reliable choice for property investors.

Want the inside scoop on property investment in the UK in 2026? Check out Assets For Life’s FREE property events, led by experienced property experts like me, Liam J Ryan. Click the link below to learn more or book your place now.