The Best Place to Buy Property in the UK 2024

In 2024, property investors increasingly seek opportunities combining stable growth potential with resilience against market fluctuations. For investors, the challenge lies in leveraging insights from past property price trends while keeping an eye on emerging signs of future growth.

Cities where there is economic development, infrastructure improvements and regeneration and investment projects as well as demographic trends favouring long-term rental are places investors should keep an eye on.

We take a look at recent trends, future predictions and what those mean for the best place to buy property in the UK in 2024.

UK Property Market Recap: 2023

Over the last year, the UK property market has experienced various shifts influenced by broader economic factors. 2023 was a financially challenging year due to economic turbulence and the rising cost of living put pressure on household finances.

The housing market was more resilient than expected in 2023, and homeowners have absorbed the increased mortgage payments as rates increased. The average house price in England decreased by 2.1% over the 12 months to December 2023.

In the last quarter of 2023, we began to see more favourable mortgage rates, better supply on the market, and more affordable property prices. While the years preceding 2023 were a sellers market, 2024 could become a great buyers market. This insight is crucial for landlords across the UK or those aspiring to get onto the property ladder in the coming year.

Looking to 2024, here are some notable trends impacting UK property prices:

• Interest Rates
  With banks moving away from policies of ultra-low interest rates, the days of highly cheap borrowing are behind us. Currently, mortgage rates stand at a relatively low 4-5%, and while unlikely to drop to pandemic levels, they’re predicted to decrease throughout 2024.
• More Affordable Properties
  Halifax predicts UK house prices will drop by 2-4% in 2024, aligning with the Office for Budget Responsibility’s forecast that a return to peak 2022 levels might not occur until 2027.
  Savills anticipates a 3% decline nationwide, with London facing a slightly steeper 4% fall. This opens negotiation doors for buyers, allowing landlords to enter the market or grow their portfolios.
• Increased Buyer Demand
  Towards the end of 2023, Zoopla observed a 19% uptick in buyer demand compared to the previous year. This increase in interest, coupled with the anticipation of lower mortgage rates and house prices in 2024, suggests that buyer competition could intensify.

• 2024 Buyers Market?
  The landscape of 2024 is shaping up to be distinctly favourable for buyers. This shift towards a buyer’s market is underscored by an economy that appears to be emerging from one of its most challenging phases—inflation has halved since last year, and 2% is predicted for 2024.

The 2024 Property Market

What does 2024 have in store for the property market and how does that impact the best place to buy property in the UK?

Entering 2024, inflation and geopolitical uncertainty, as well as high interest rates and low real incomes dominate the narrative. Several key trends will have an impact on buyers and the market generally in 2024:

• Inflationary Pressure
  As inflation continues to exceed the Bank of England’s 2% target, consumer purchasing power remains constrained, continuing the departure from the heightened housing market activity of 2021 and 2022.This financial squeeze, alongside ongoing uncertainties, is expected to temper buyer willingness to invest in property, likely leading to a contraction in the housing market for 2024. Predictions suggest a decrease in house prices by 2-4%, marking a shift from the previous years that were driven by COVID-19 and stamp duty incentives.
• Mortgage Rates
  While mortgage rates show signs of reduction from their peak, they remain higher than the historically low levels of 2-3% seen two years ago, now more likely hovering around 4-4.5%.This shift prompts a trend towards longer-term mortgages as individuals seek to manage repayments. Initiatives like the Mortgage Charter offer support for those struggling financially, presenting options such as term extension, interest-only payments for six months, or an early switch to a new deal.
• The Construction of New Homes in 2024
  In 2024, the house-building sector is anticipated to mirror 2023’s pace. JLL is projecting 150,000 construction starts—the same number as in 2023. A housing undersupply is still predicted to reach a 720,000-home shortfall by 2028.Home builders will be conscious that from 2025, all new homes in England must be built to the upcoming Future Homes Standard. These homes must have the equivalent of 75-80% less carbon emissions than homes built to 2013 standards.New homes will incorporate enhanced energy-saving features such as superior insulation and both air and ground source heat pumps alongside triple-glazed windows to significantly reduce carbon emissions. These guidelines introduce challenges for home builders, including higher construction costs estimated between £5,000 and £10,000 per home.
  
  What does this mean for investors?
  This housing shortage means there could be a strong demand for homes, which might increase their value. For investors, putting money into new houses that meet future energy-saving standards, despite being a bit more expensive to build, could be a smart move as these homes are likely to be more attractive to buyers and renters looking for eco-friendly options.
• First-Time Buyer Trends
  In 2024, a shift in the mindset of first-time buyers is noticeable, with a significant portion open to relocating or downsising for home ownership.Political factors in the UK, particularly the upcoming election, could introduce market uncertainties. The appeal of shared ownership schemes is expected to rise as affordability challenges continue, though this doesn’t guarantee an increase in supply.

The Property Landscape for Investors in 2024

There are reasons for investors to be optimistic in 2024 and there are plenty of opportunities to be found due to a few emerging trends.

• A Rebounding Economy
  The UK economy is on an upswing, with a 2% growth expected in 2024, signalling a positive shift for property investors as increased consumer confidence could translate into higher demand in the real estate market.
• Lower Morgage Rates
  With the Bank of England’s base rate anticipated to drop from 5.25% to 4.5% by the end of 2024, lower mortgage rates are beneficial for property investors looking to finance new property purchases.
• Infrastructure Investment Driving Growth
  The UK’s investment in infrastructure across the country is set to invigorate the property market. Property prices are expected to rise especially in regions undergoing significant development like the north of England.
• Sustainability Trends
  The growing demand for sustainable and energy-efficient properties marks a trend that could command premium prices. This allows property investors to cater to the environmentally conscious market segment and capitalise on higher returns.
• Regional Shifts and Opportunities
  ​​The shift of interest to regional cities like Manchester, Birmingham and Bristol due to job growth, affordability and development projects opens new avenues for property investors, diversifying investment portfolios beyond the saturated London market.

2024 Property Market Forecast

The overall outlook for the UK property market in 2024 suggests a continued fluctuation in house prices. Forecasts by Halifax predict a fall in house prices between 2% and 4%, with a recovery to peak 2022 levels not expected until 2027.

A period of adjustment presents opportunities for buyers, particularly in a market where demand has increased. Zoopla reported a 19% increase in buyer demand towards the end of 2023, hinting at improved market sentiment and potentially more competitive conditions for buyers in 2024​.

The Rental Market in 2024

In 2024, the rental market is poised for complexity. Higher mortgage rates drive more people to rent for longer, contributing to a shrinking supply of rental homes. Due to tax and regulatory pressures, many landlords have sold their buy-to-let properties.

These conditions could increase buy-to-let yields in 2024, due to increasing rents and adjusting property and mortgage rates. As a longer trend, we could see landlords re-entering the market, increasing rental availability and moderating rent levels.

Here are rental trends investors should keep in mind when it comes to finding the best place to invest in the UK.

• Rental Reform Bill

The Rental Reform Bill is set to significantly alter the landscape for landlords in the UK. With its introduction, landlords will need to navigate a series of new regulations and standards, aiming to enhance tenant rights and improve the quality of rental accommodations.

These changes will require landlords to adjust their management practices and possibly incur additional costs to comply with the heightened standards, potentially reshaping the rental market’s dynamics and the approach to property investments.

• Rents Still Rising

While house prices saw a decrease in 2023, rents moved in the opposite direction, significantly rising from pre-pandemic average inflation of 1.5% to stabilising at a 6% increase in the latter part of the year.

Annual rental growth across the UK in January 2024 was 7.8% according to Zoopla—down from 8.2% in the year to December. Northern regions had above-average growth, including the North East (9.9%) and the North West (9.8%).

The Best Places in the UK to Buy Property in 2024

Identifying the prime locations for property investment in the UK in 2024 requires an understanding of market dynamics, regional growth prospects and emerging trends.

What should landlords be on the lookout for?

• Economic Growth and Stability
  When evaluating regions for property investment in 2024, landlords should prioritise areas with strong economic growth and stability. A thriving local economy often translates into a robust job market, attracting potential tenants and ensuring consistent rental demand.
• Rental Yield Potential
  Landlords should assess the rental yield potential of any region or city they consider investing in. High rental yields indicate a profitable return on investment, reflecting the balance between property prices and rental income. Areas with growing rental demand but relatively affordable property prices are typically hotspots for achieving higher yields.
• Regeneration and Infrastructure Projects
  Regions undergoing significant regeneration and infrastructure development are attractive for property investment. Such projects not only enhance the area’s appeal but can also lead to property value appreciation. Landlords should look for government or private sector investments in local amenities, transportation links and public spaces.
• Demographic Trends
  Understanding an area’s demographic trends can provide valuable insights into the type of properties in demand. For example, regions with a significant population of students or young professionals may offer lucrative opportunities for buy-to-let investments in smaller apartments or HMOs (Houses in Multiple Occupation).

The Best Places to Invest in Propety in 2024

Doncaster

Doncaster is emerging as an attractive investment destination in 2024, buoyed by its recent city status and accolades as a top European City of the Future. Its role in Yorkshire’s economic growth is supported by significant infrastructure projects and job market expansion, offering a compelling case for property investment.

The strategic location in South Yorkshire, with excellent transport links, including a major railway station and proximity to the M18 motorway, enhances its appeal for trade and logistics. This connectivity, coupled with substantial development projects like the Gateway East and the revitalisation of Doncaster Sheffield Airport, is set to boost the city’s economic landscape further.

The forecast for property investment in Doncaster is optimistic, with projections indicating a potential 20.5% rise in house prices by 2027. The rental market in Doncaster is also expected to see substantial growth, with rents predicted to increase by 16.5% in Yorkshire and the Humber between 2024 and 2028.

The demand for rental properties is driven by educational institutions and the city’s excellent connectivity, making it an attractive location for HMOs and flats. Doncaster’s ambitious urban regeneration, including the Doncaster Urban Centre Master Plan and the £70m Doncaster College Hub, aims to transform the city into a vibrant hub for businesses and investors, promising a lucrative future for those investing in the area.

Bristol

With a history of steady population growth due to its appeal as a cultural and economic hub, demand for various housing types—from city-centre apartments to suburban family homes—is consistently strong. Bristol’s job market and attractive lifestyle draw professionals, families and students, giving landlords plenty of options regarding tenant demographics.

The beginning of 2024 has brought a gradual uplift to Bristol’s housing market, with certain areas witnessing a rise in property values.

• Bristol’s central region experienced an increase, with the sale price of an average residence reaching £333,806 in January, marking an uplift of nearly £12,000 from the preceding month.The limited availability of new housing in sought-after areas will potentially sustain higher property values. Infrastructure improvements enhancing connectivity are also expected to continue propelling property values upward.
• In some of Bristol’s more prestigious neighbourhoods, like Redland and Clifton, property prices are on a downward trend. High-end homes stay on the market as sellers face challenges in attracting buyers.
• Across the BS postcode areas, there’s been a noticeable decline in home sales over the past year, with certain areas such as Avonmouth and Hengrove experiencing a dramatic drop in transactions, by over half in some instances.

Leeds

The north of England has seen tremendous growth in buyer demand since mid-2020, and Leeds is one of the cities that has benefitted the most. This bustling city has experienced the country’s second-fastest rise in house prices, and it shows no signs of slowing down.

With numerous regeneration projects underway, an abundance of job opportunities and a growing demand for properties, Leeds is quickly becoming one of the most sought-after locations for property investment.

Even before the pandemic, Leeds was a hot spot for UK property investors. However, the shortage of new housing construction due to the pandemic has only added fuel to the fire, driving up property prices even further. JLL predicts that house prices in Leeds will continue to rise by 13.5% through 2026, making it an ideal city for property investors.

Several areas of Leeds are experiencing a surge in property prices. One of these areas is Kirkstall, which boasts a prime location in close proximity to the city centre. Its popularity with buyers is driving prices upward.

​​Another area that investors should consider is Burley, which has long been a favourite among students. With its strategic location between Kirkstall and the city centre, Burley offers easy access to transportation and affordable housing options that can generate a strong return on investment.

Property Prices in Leeds

Recent findings from Zoom Property Buyer highlight significant growth in house prices across the UK’s largest cities. The North West has witnessed the most substantial price jump in the UK, with a 34% increase since January 2020.

In June 2023, Leeds’ average property value reached £235,647, marking a 24% rise and ranking it fifth among the UK’s major cities in terms of price growth. A Leeds property investment could be a great addition to an investor portfolio.

Birmingham

 Birmingham’s property market is attracting more and more investors due to its growing population and housing shortage, making it one of the best cities to invest in the UK.

• Commonwealth Games
  JLL spotlighted Birmingham as a leading city for property price growth, influenced by its hosting of the 2022 Commonwealth Games. The Commonwealth Games have historically led to an average property value increase of 14.9% in host cities, and Birmingham’s hosting in 2022 has similarly set the stage for significant growth.
• Rising Rental Demand
  The city’s evolving job market and growing reputation have fueled a surge in rental demand. Predictions suggest a 19.3% increase in rent by 2027, indicating a strong market for investors.
• Transformational Projects
  With an investment of £106 billion, HS2 is poised to enhance Birmingham’s connectivity, making it a hub in the UK’s transport network and further supporting regional growth.
• The Big City Plan
  The Big City Plan is Birmingham’s ambitious 20-year strategy to reinvent its city center into a global metropolitan hub. Birmingham aims to generate significant economic, social and infrastructural growth by adding 1.5 million square metres of new floorspace, creating over 50,000 jobs and injecting £2.1 billion annually into the local economy.Additionally, the initiative seeks to enrich city life by improving connectivity, expanding public spaces, and increasing housing and leisure facilities, all while preserving the city’s cultural heritage.
• Corporate HQ’s
  Following HSBC’s lead in 2018, Goldman Sachs’ new Birmingham base reinforces the city’s appeal as a key business hub outside London, attracting high-earning professionals and invigorating the local rental market.The choice of Birmingham by major corporations like HSBC and Goldman Sachs is indicative of a broader trend where prime employers are venturing into regional cities, offering a lucrative opportunity for property investors due to the influx of a high-earning tenant demographic.

Birmingham Property Prices

Over the past year, heightened demand has driven rental prices up by 9.2%, while property prices are also expected to continue to perform more strongly in Birmingham.

Yields Across Birmingham

• Digbeth
  Joseph Mews reports that Digbeth is currently experiencing average rental yields of 6.6%, a figure that has the potential to grow should the demand from tenants continue to increase.
• Selly Oak
  Selly Oak has some of the city’s highest yields of 9.6%, thanks in part to significant recent investments in its life sciences sector, positioning it as the top-performing area for yields.
• City Centre
  Within the heart of Birmingham, landlords are seeing average rental yields of 6.2%. These figures, however, can fluctuate greatly based on the type of property and its location, with the city centre predominantly comprising flats that are popular among young professionals.
• Edgbaston
  Another promising area for property investors is Edgbaston, where rental yields stand at an average of 6%, offering solid opportunities for strong returns on investment.

According to JLL, Birmingham, as the most populous city outside of London, has been the most active investment market in built-to-rent homes for the last 3 years.

Birmingham struggles with an undersupply of rental properties. Rental stock on the market in Birmingham in Q4 2023 was down 3.1% compared to the five-year average. The shortage of stock across the city has fuelled significant rental growth over the past year, at 16.7%—the highest of the UK’s Big Six (Bristol, Edinburgh, Glasgow, Leeds, Manchester).

Luton

 The pandemic led to a surge in remote working and a shift in priorities for renters and homebuyers. People are now looking for more space and larger square footage, preferably in areas close to cities. One location that fits the bill is Luton, a commuter hotspot just 30 minutes from the capital by train.

Luton is particularly popular among first-time buyers thanks to its relatively low property prices and high potential for capital gains.

In addition to its proximity to London, Luton also boasts excellent transport links, with easy access to the M1 and A1 motorways, as well as Luton Airport. The city is also home to a thriving business scene, with major employers including London Luton Airport, Vauxhall Motors and the University of Bedfordshire.

Luton offers a diverse range of properties, from Victorian terraces and new-build flats to larger family homes. The city has seen significant regeneration in recent years, with major projects including the £110m redevelopment of Luton Airport and the £300m mixed-use development of the former Vauxhall Motors site.

These initiatives are expected to further boost property prices in the city and make it an even more attractive location for investment.

 Luton Property Prices

 In November 2023, Luton property prices dipped 2.5% overtaking the regional average decline for the East of England. This downturn is part of a broader trend that has seen a 4.5% decrease in property values over the year.

According to the Land Registry, Luton’s average property price is now £273,000. Over the past year, Luton’s property values have diminished by £13,000. For investors, this situation may present a favourable opportunity to get a good deal on a property.

 The average cost for a property for first-time buyers in Luton now stands at £240,000, reflecting a £12,000 decrease from the previous year yet showing a significant £29,000 increase from November 2018.

In comparison, previous homeowners invested an average of £313,000 in November, paying 30.6% more than first-time buyers. Property prices in Luton are 21.2% below the East of England’s average of £347,000, and its prices are higher than the UK average of £285,000; Luton emerges as an attractive market for investors looking to capitalise on lower prices and potential long-term gains.

Manchester

Manchester’s ongoing transformation and regeneration projects have made the city an even more attractive place to invest in property. Its excellent transport links and strong economy have led to a significant increase in property prices over the last few years.

The city offers a wide range of properties, including apartments, townhouses and larger family homes. With ongoing investment, Manchester will see even more growth in property prices over the next few years.

Manchester House Prices

In the early part of 2023, Manchester’s real estate market saw properties fetching an average sale price of £306,725. This upward trajectory continued into 2024, with the first nine weeks recording an average sale price of £328,981.

For investors eyeing opportunities beyond the steep London market, Manchester offers a more accessible entry point with its current average property price standing at £231,000, starkly lower than London’s £723,000 average.

JLL forecasts position Manchester alongside Birmingham as the top contenders for house price growth leading up to 2027. They project Manchester to lead UK cities in sales price growth throughout 2024 with an expected 2.5% increase. This growth is particularly significant against a backdrop of predictions for a sluggish UK market in 2024, highlighting Manchester’s potential to defy broader market trends and continue attracting investment.

Manchester Rental Market

Salford and Oldham are the ones to watch for their investment potential. Salford is known for its regeneration efforts and MediaCity, and Oldham leads the boroughs in annual house price growth yet remains accessible at an average price of just over £190,000.

Manchester City Centre, known for its strong buy-to-let market, performs particularly well. Apartment rental prices saw a 20% hike in the previous year. Looking ahead, JLL predicts Manchester City Centre to experience the most pronounced growth in rental values among UK cities, with an anticipated annual increase of 4% until 2027.

The city already boasts impressive rental yields. South Manchester’s M14 postcode area offers yields up to 9.5%. The competitive rental market is further underscored by a significant drop in available apartment listings, falling from 2,216 in February 2021 to just 528 in February 2023. This underscores a tight market spells opportunity for investors.

Leeds

Leeds is stepping into the spotlight as a prime location for property investment in 2024, capitalising on its dynamic role in the economic advancement of Yorkshire. Recognised for its vibrant city life and being a key player in the Northern Powerhouse initiative, Leeds combines a rich industrial heritage with a forward-looking approach to urban development.

Positioned at the heart of the UK with superior transport networks, including a major railway station and access to major motorways, Leeds is perfectly primed for both commercial and residential investment. Its strategic importance is bolstered by significant developments, such as the South Bank Leeds regeneration project, which is set to double the size of the city centre, and the ongoing expansion of Leeds Bradford Airport, enhancing the city’s connectivity and economic prospects.

Investors can expect Leeds to offer lucrative opportunities, with a potential for substantial appreciation in property values and rental incomes, driven by urban regeneration efforts and an expanding economy.

Leeds Propety Prices

 By the start of 2024, properties in Leeds have been selling at an average price of £222,661. As we look ahead, the Leeds real estate market is poised for significant growth. Over the last 10 years, house prices in Leeds have risen by 55%, with an additional increase of 21% anticipated by 2026.

Leeds has seen a surge in Buy-to-Rent (BTR) investments, climbing to £350m in 2023—a 78% increase from the previous year. While its operational BTR stock stands at 3,400 homes—smaller compared to Manchester—the city is rapidly expanding its portfolio with around 8,200 homes in development, indicating a bright future for the Leeds property market.

Liverpool

 Liverpool is an attractive option for property investors due to its status as a world-class, internationally recognised city that attracts over £1 billion a year in investment. It is also one of the most affordable places for property investment in the UK, making it an ideal choice for first-time buyers and investors looking to diversify their portfolio.

Liverpool has also been performing well in terms of capital growth. Additionally, the city has high rental demand and relatively low house prices, making it an attractive location for those looking to generate rental income. As a result, Liverpool continues to remain on the radar of one-to-watch property investment lists.

Liverpool Propety Prices

Liverpool’s real estate market went against broader trends with a noticeable increase in December 2023. The city’s average property price climbed to £174,603, a 1.2% hike from November, according to Land Registry figures.

Liverpool property price growth varied across different types of properties; flats led with a 2.3% increase to an average of £133,170, while detached houses grew by 1.2% to £350,658. Semi-detached and terraced houses also saw gains, with prices rising to £216,372 and £151,503 respectively. Some properties in Liverpool fetched sales prices significantly above these averages.

Property Solvers’ October 2023 update highlights that Liverpool, along with Manchester, outperforms in annual price growth, with a 1.1% increase for Liverpool. This is a dip from the previous year but still positions these cities as strong contenders in the market. Cities like Southampton, Bournemouth, and Portsmouth faced declines, underscoring the regional disparities within the UK housing market.

Liverpool continues to attract substantial investor and developer interest, particularly in high-potential areas like Liverpool Waters, which has undergone extensive transformation. This development enhances Liverpool’s appeal to a wide demographic, maintaining its status as a prime location for investment.

Where is the Best Place in the UK to Invest in Property?

Manchester and Liverpool emerge as standout choices for property investment in the UK. Both cities showcase robust growth potential, buoyed by significant regeneration projects and a vibrant mix of cultural and economic factors.

Manchester has been identified as a leader in house price growth projections up to 2027, with JLL highlighting its strong market and rental yield potential. The city’s diverse economy, coupled with major development schemes, positions it as a prime location for investors seeking long-term gains.

Liverpool shares a similar appeal, particularly with developments like Liverpool Waters enhancing its desirability. The city’s capacity to maintain high rental yields, alongside a steady increase in property values, makes it an attractive option for investors. The regeneration efforts have not only improved the city’s infrastructure but also its overall attractiveness to students, professionals and families.

What is the Safest investment with the Highest Return in UK?

While no investment is entirely risk-free, Doncaster presents a compelling case for potential good returns. The city’s growing economy, significant development projects and strategic location in South Yorkshire offer attractive prospects for investors looking for opportunities that balance potential returns with manageable risks.

Property prices in Doncaster remain attractively low in comparison to the broader English market and projections are highly optimistic, with a predicted house price increase of 20.5% by 2027. The rental sector is similarly expected to witness robust growth, with a forecasted rise in rents of 16.5% across Yorkshire and the Humber from 2024 to 2028.

Further fuelling Doncaster’s appeal are its ambitious urban renewal projects, such as the Doncaster Urban Centre Master Plan and the £70m investment in the Doncaster College Hub. These projects are set to transform the city into a dynamic business and investment hub, promising rewarding prospects for future investors.

When it comes to the best place to buy property in the UK, a few cities stand out for their growth potential thanks to incoming investment, regeneration, active job markets and property prices that offer good returns. To find out more about investing in UK property, get in touch with our experts.