Manchester has surpassed London as the most sought-after location for buy-to-let investors, according to new data from The Property Buying Company.
Analysis of 295 investors’ preferences shows that 23% are targeting property in Manchester, compared to 18% focusing on the capital. The findings suggest a shift in investor sentiment towards regional markets offering higher yields.
Regional investment patterns
The data reveals Liverpool ranks third at 8%, followed by Birmingham at 7%, with Luton and Nottingham each attracting 3% of investor interest. The North West remains the most popular region in England and Wales, with 18% of investors stating it as their preferred location.
Manchester’s appeal appears driven by rental yields rather than rental growth alone. Average rents in the city increased by 3% over the past year to £1,349 per month, slightly below the national average increase of 3.4%. However, gross rental yields stand at 6.6%, significantly higher than London’s 5.1%.
Long-term price performance
The shift in investor preferences follows data released last week showing Manchester topped house price growth over the past decade with a 63% increase, while London recorded just 7% growth during the same period. Analysis by Rightmove identified the four fastest-growing local areas as suburbs within Greater Manchester.
Karl McArdle, Co-Founder of The Property Buying Company, noted: “Despite not promising the highest rental yield, Manchester has established itself as one of the UK’s most attractive investment opportunities. Our data shows that demand for property in Manchester is nearly three times higher than in Liverpool and more than three times higher than in Birmingham.”
McArdle attributed the city’s popularity to a combination of factors including population growth, high rental demand, ongoing regeneration projects, multiple universities and major employers.
The findings come as estate agents shift focus to buyers as market rebalances across the UK property sector. Meanwhile, development activity continues in regional cities including Liverpool, reflecting broader investor confidence in northern markets.
The data suggests regional cities are increasingly competing with London for buy-to-let capital, driven primarily by yield differentials and stronger capital growth prospects in areas with lower entry prices.