Best UK cities for buy-to-let property investment this year

From a property investment point of view, London tends to steal the spotlight. However, it’s not the only city in the UK worth your attention right now. As we move further into 2025, discerning Indian investors are looking for investment opportunities beyond the capital city to diversify their property portfolio.

Rental yields in regional cities are rapidly rising. Regeneration zones are flourishing. And most importantly, the UK’s property landscape continues to stand as one of the most stable and transparent globally. An interesting fact to note here is that Indian buyers are now the largest group of property investors in London, outpacing the residents!

Whether you are planning to invest in a long-term rental income, setting up a base for your child studying overseas or securing a future asset in a globally renowned and trusted economy, we will break down where Indian investors are buying real estate within the UK and what you should be looking for.

Top UK cities for property investment in 2025

Beyond London, here are the top five best-performing UK cities for buy-to-let investors-based on the rental potential, local economy and relevance to Indian buyers.

1. Manchester

Average rental yield: 6-7%

Manchester

Reason Indian investors prefer this city: Lower entry price compared to London. Similar tenant demand. Landlords can earn better rental returns.

Thanks to its buzzing lifestyle and commercial culture, Manchester is flooded with professionals, students and tech enthusiasts. As an Indian property investor, if you are seeking quick income generation and continue to benefit from long-term price growth, Manchester ticks all boxes.

You can look for high-performing development options in Ancoats, Salford Quays and Deansgate.

2. Birmingham

Average rental yield: 5-6%

Birmingham

Reason Indian investors prefer this city: This city is undergoing major regeneration plans, plus is host to a relatively younger population. These factors lead to a consistent demand for both investment as well as buy-to-let opportunities.

Birmingham is transforming into an urban hotspot rapidly. This city is home to five well-regarded universities, a young population and a tech & financial sector that is booming. For indian families, Birmingham is an appealing choice due to its excellent educational options and a strong, harmonious community.

3. Leeds

Average rental yields: 6%

Leeds

Reason Indian investors prefer this city: This city is home to major financial, law and digital media firms in the UK.

The demand for rental property in Leeds is growing thanks to rising demand from professionals, overseas students and NHS workers. For Indian buyers, Leeds is a smart pick due to its rapid transformation, without the overpriced price tag.

4. Liverpool

Average rental yields: 7-8%

Liverpool

Reason Indian investors prefer this city: When compared to other cities, Liverpool offers landlords immediate return on investment (ROI), making it an ideal choice for cash flow-focused buyers.

Liverpool is high on the radar for discerning investors seeking high rental yields. This is particularly observed in student-orientated & creative neighbourhoods, where buyers will find options with competitive pricing and a large tenant pool. On a side note, it’s advisable to stick to trusted locations, including the Knowledge Quarter or Baltic Triangle.

5. London

Average rental yields: 3.5-4.5%

London

Reason Indian investors prefer this city: This city comes with a global prestige, an emotional connection between Indians and the English and the advantage to benefit from long-term value.

Despite comparatively lower rental yields, London continues to attract a large number of Indian investors. The list includes billionaire Indian families like the Ambanis, Poonawallas and Mittals as well as parents of Indian students, professionals and investors across different price ranges.

With house prices projected to rise by nearly 24.5% by the end of 2029, London continues to mark its resilience and long-game strategy.

Here are a few top hotspots for savvy Indian buyers:

  • Canary Wharf tops the list due to its consistent demand among tech and finance professionals.
  • Ealing & Acton are preferred for their family-friendly amenities, including well-regarded schools and spacious homes for sale.
  • Kensington & Chelsea: Buyers prefer these towns due to rapid capital appreciation and luxurious living facilities.
  • Southall & Wembley: These are well-established London neighbourhoods with vast Indian communities in addition to excellent connectivity.

Why investing in the UK as an Indian investor a smart move

There are several factors that make the UK stand as a leading property investment hub for global buyers.

  • The rental income is earned in GBP, a stronger currency that outpaces the rupee.
  • Education is another crucial factor. Almost 100,000 Indian students study in the UK. Many families have started buying properties rather than paying rent.
  • The UK offers legal protection to buyers, including transparency, an investor-friendly environment and no restrictions on foreign ownership.
  • Hands-free management is another factor that helps UK top the list. With expert guidance and services from Benham and Reeves, you do not need to be present in the UK to own and rent a property successfully here.
  • Connect with Benham and Reeves India

    With offices in Mumbai & Delhi, Benham and Reeves has assisted many Indian investors in buying, managing and growing their UK property portfolios. Whether you are interested in new homes for sale in the UK, need a London property investment guide or are looking for hands-free rental management services, our team can help with property sourcing & price negotiation, legal & documentation assistance, end-to-end property lettings & management services and tailored viewings as per your UK trip schedule.

About the Author

With over 65 years of experience in the London property market, Benham and Reeves offers a comprehensive service for Indian investors, covering property sales, purchases, and full letting and management. To meet increasing international demand, we now provide specialist sales advisory services for properties in London and the UAE, helping Indian investors expand and diversify their global property portfolio.

by Benham and Reeves

Benham and Reeves
Sign up to our newsletter