North vs. South: Where Should You Invest in 2025?
The UK property investment 2025 market continues to evolve, influenced by regional disparities between the North and South. Understanding these shifts is essential for those looking to make informed investment decisions in 2025.
Economic Growth and Regional Disparities
Recent forecasts suggest that the economic growth gap between UK regions is set to widen. London and the East of England are projected to experience Gross Value Added (GVA) growth of 1.7% between 2025 and 2028, surpassing the national average of 1.6%. In contrast, regions such as the Midlands, North of England, Scotland, and Wales are expected to see slower-than-average growth during this period. This disparity highlights the importance of regional economic policies and investment initiatives that could shape local markets.
UK Property Investment 2025: Price Trends
Despite the economic forecasts, the UK property investment 2025 market tells a different story. The North and Midlands have been outperforming the South in terms of price growth. This trend presents opportunities for investors to target areas with strong job growth, rising demand, and more affordable entry points.
In March 2025, UK house prices showed no growth, with the average home price remaining at £271,316. Notably, Northern Ireland recorded the highest annual price increase at 13.5%, while London had the lowest at 1.9%, despite being the most expensive region with an average price of £529,369. The Guardian recently wrote a great blog on how the house prices in London are becoming unaffordable. This stagnation in London could indicate a period of market correction or a shift in investor focus towards more affordable regions.
Investment Hotspots for UK Property Investment 2025
Several cities in the North and Midlands have emerged as property investment hotspots:
- Manchester: Recognised for its robust economic growth, Manchester continues to attract investors, offering promising returns. The city boasts a thriving tech and business sector, coupled with a young and growing population, making it an attractive prospect for buy-to-let investors.
- Birmingham: With ongoing regeneration projects and a forecasted price rise of 19.9% by 2028, Birmingham remains a top choice for property investment. The completion of HS2 will further enhance its appeal, improving connectivity and boosting local property demand.
- Derby: Positioned as a leading city in the East Midlands, Derby is undergoing significant regeneration, with property prices expected to increase by 22.8% over the next four years. Its strong engineering and manufacturing industries provide stable employment opportunities, contributing to sustained demand for housing.
- Liverpool: The city continues to experience significant investment in infrastructure, including new commercial developments and transport improvements. With lower-than-average house prices and high rental yields, Liverpool remains a prime location for investors.
- Leeds: A major financial hub outside London, Leeds offers strong rental yields and steady capital growth. Its growing student population and business expansions further cement its status as an attractive investment destination.
Key Considerations for UK Property Investment 2025
When deciding between investing in the North or South, consider the following factors:
- Affordability: The North offers more affordable property prices compared to the South, allowing investors to enter the market with lower capital. This affordability can translate into higher rental yields and potential for capital appreciation.
- Growth Potential: Despite slower economic growth projections, property prices in the North have been rising, indicating strong demand and investment potential. The presence of key industries and government initiatives to promote development could further enhance property values.
- Economic Policies: Be mindful of economic policies and global events that could impact regional markets differently. For instance, global trade tensions could influence economic performance in export-dependent regions, while government-backed incentives for property development could spur growth in specific locations.
- Rental Demand: Cities with strong student populations, thriving business sectors, and transport connectivity tend to have higher rental demand, making them attractive for buy-to-let investors.
Conclusion
In 2025, the decision to invest in the North or South of the UK hinges on balancing affordability, growth potential, and economic forecasts. The North presents compelling opportunities with its affordable prices and rising demand, while the South offers stability but at higher entry costs. Investors should conduct thorough research and consider regional economic indicators to make informed decisions aligned with their investment goals.
Ultimately, the best investment location will depend on individual risk tolerance, long-term objectives, and market conditions. Whether opting for the high-growth potential of northern cities or the established stability of the South, strategic planning and due diligence will be key to securing a successful investment in 2025.
If you would like guidance on this topic area more, feel free to contact us at Nesthub properties if you would like us to help you start building your property portfolio.
