.With the lowest average yield out of our top picks for UK investment areas, you might not automatically consider Edinburgh as a good choice for the best places in the UK to invest in property for rental returns. While the overall average rental yield of 4.01% for the Scottish capital may not be as impressive as those in other locations, the potential is still there when you explore certain parts of the city. In Edinburgh city centre, Zoopla states the average purchase price of a one-bedroom flat as £187,225, while the average rent costs £991 pcm. This would mean that average yields for Edinburgh city centre come to around 6.35%. Evidence also suggests that rental costs in Edinburgh are rising rapidly, with a reported growth of 46.3% between 2010 and 2019. By analysing the most popular buy to let cities, it is evident that there is a clear divide between the North and the South when it comes to property investment. Five of the eight cities in this list to the best place to invest in property in the UK are located in the North. The remaining cities are based in the Midlands and Scotland, with no Southern cities offering signs of a high-performing property market in terms of yields, affordability, growth. So why is it that the best areas for buy to let tend to be up North? Let us start by looking at property prices in three of the top cities in the South. In Brighton, average property prices according to Zoopla stand at £470,496. In Bristol, the average is a little lower at £330,443, and in London, the average property price is a whopping £979,200. Because of these high purchase prices, it is difficult to generate high rental yields.
So, we know that Northern cities offer some of the best opportunities for capital growth, rental yields, low prices, but how has the market changed over recent years? Here is a timeline with information on key events throughout the UK property market from 2018 to 2020.

4TH JANUARY 2018 The West Midlands region was reported as the highest performing UK region for house price growth in 2017, having risen by 5.2% on average. (Nationwide)

29TH MARCH 2018 Rental returns were recorded as having decreased by 2.3% year on year. The lowest rental yields in the country were reported to be in London, the South East and the South West, where low yields have brought down the country’s average. (Financial Adviser)

16TH APRIL 2018 Liverpool, Leeds, and Manchester were named ‘ones to watch’ in the UK property market. Due to ongoing growth, investment, and regeneration, these cities were considered the best places to invest in property in 2018. (Buy Association)

18TH JUNE 2018 Landlords in the UK were urged to consider Liverpool as the best place to buy property for investments. This is due to high yields in Liverpool’s L1, L6 and L7 postcodes. (Telegraph)

5TH JULY 2018 Despite low growth rates, property prices in London are seeing a slight improvement. In the twelve months to the end of June 2018, the annual fall in house prices reached 3.8%, which was less than the previous 4.2% decrease. (Property Wire)

14TH SEPTEMBER 2018 Savills predict that North West property prices will rise by 18.1% by 2022, while London will see an increase of 7.1% during the same period. Other regions expect attractive growth, with an increase of 17.6% predicted for the North East and Yorkshire, and 17% growth for Scotland. (Buy Association)

26TH DECEMBER 2018 Edinburgh’s property market displays strength, with the highest rate of house price growth in over a decade at 10.6%. Properties in the Scottish capital were also selling at a quicker rate compared to the previous year. (Financial Times)

28TH FEBRUARY 2019 Figures from Nationwide revealed that property prices in the UK had dropped by 0.1% in February 2019. Experts remained hopeful that the housing market would improve, however, the fact that unemployment rates were falling, wage growth was increasing. (Mirror)

25TH APRIL 2019 An analysis revealed that the number of property sales in the South of England had decreased by 13% since 2015. During the same period, however, sales in Northern England had grown by 6%. (Independent)

21ST JUNE 2019 Due to its thriving university scene, Newcastle was named the best university city in the UK for property investment, followed by Nottingham, Leeds, Sheffield, Manchester. (Property Investor Today) 30TH AUGUST 2019 Reports that there is a demand for properties in Manchester due to a 117% growth in the number of people moving to the city in July 2019 compared to the previous year. (Buy Association)

25TH OCTOBER 2019 An updated Totally Money guide to the best places to invest in property in the UK for 2019/20 was released, showcasing Liverpool as the best location for buy to let yields with six postcodes making the list. (Buy Association)

14TH NOVEMBER 2019 Savills predicted that over the next five years, property prices in the North West will grow six times faster than that of London. In the same report, it was predicted that the number of first-time buyers in the UK would drop following the withdrawal of the Help to Buy Scheme. (Property Industry Eye)

13TH DECEMBER 2019 After Boris Johnson’s win at the general election on 12th December, property experts had predicted a boost in the UK housing market thanks to increased certainty. (Your Mortgage)

11TH FEBRUARY 2020 The North of England remains the best area for buy to let rental yields due to de-mand outpacing supply during the final quarter of 2019. (Landlord News)
While we know that property prices in a number of UK cities are currently performing highly, with some fantastic rental yields and property growth areas in the UK, the issue of property prices after Brexit is one that still leaves many investors feeling uncertain. After leaving the EU officially on the 31st of January, the UK has entered into a transition period that will last until the end of 2020. During this period, the UK will negotiate with the EU until a final deal has been reached. The main reason that Brexit has affected the UK property market over recent years has been due to uncertainty brought on by the vote. Following Boris Johnson’s election victory in December 2019, however, things have massively improved in what has been named the ‘Boris Bounce’. Because Johnson was elected with such a high majority, the UK regained a lot of confidence in both the property market and economy. Immediately following the general election result, the GBP reached the highest rate it had been at since May 2018, investment sectors saw a growth in share prices, and property prices jumped by 1.8% in one month. Due to this boost in market confidence, experts are predicting that both property prices are rental values are set to see a rise over the coming years, even with some remaining uncertainty around the Brexit deal. Specifically, the best places to buy in UK areas are expected to continue to be those in the North West, with JLL predicting a 3% growth in rental costs for Liverpool and Manchester. Rightmove has also suggested that UK property prices as a whole will increase by 2% on average during 2020.
While this guide has offered an in-depth analysis of the best places to invest in property, UK investors should take time to think about the locations that best meet their specific goals. Think about what it is that you care about most when investing in a buy to let property to understand where the best place to invest in property is. Liverpool and Manchester are the top two locations to invest in. If your main motive is to find a property that will significantly grow in value, best UK cities for capital growth is to be Liverpool, Manchester, Birmingham, Newcastle. On the other hand, if rental yields are more important to you, the best investment areas to consider are Liverpool, Manchester, Sheffield, Edinburgh. When thinking about UK property investment on a broader scale, however, the best places to invest in property are normally areas that tick multiple criteria instead of just one. This way, you are able to benefit from the maximum rate of return through both rental income and capital appreciation. So, with this in mind, where is the best place to buy an investment property if you want to benefit from these returns? When thinking about the best place to invest in property, UK investors should definitely look towards Liverpool and Manchester. These two cities tick all three boxes for affordability, rental yields, and capital growth, and have been hailed the best places to invest in property in 2018, 2019 and 2020. With a high and growing population of students and young professionals, ongoing regeneration, and predictions for some of the strongest capital growth over the next five years, it’s easy to see why these North West cities are hotspots for buy to let.