Analysis by peer-to-peer real estate investment platform easyMoney has identified the top-performing UK cities for property investment returns since the Bank of England began raising interest rates in late 2021.
The analysis examined house price growth across 15 major cities, comparing data from December 2021 to May 2024.
Standout cities for property growth
While the national average house price increased by 7%, some cities have significantly outperformed this figure, establishing themselves as property investment hotspots.
- Sheffield leads the way, with house prices growing by 12.7%. In December 2021, the average house price in Sheffield was £192,542, rising to £216,934 by May 2024.
- Bradford follows with growth of 10.3%, reaching £174,930.
- Leeds also saw strong returns, with prices increasing by 10% to £231,743.
Other cities showing above-average growth include:
- Newcastle: +9.9%
- Leicester: +9.5%
- Bristol: +9.4%
- Edinburgh: +9.1%
- Cardiff: +8.8%
- Glasgow: +8.7%
- Nottingham: +8.5%
- Liverpool: +7.7%
Struggling cities
In contrast, some of the UK’s traditionally strong property markets have seen much lower growth:
- London and Manchester have both recorded just 2.3% growth since December 2021.
- Brighton saw an increase of 4.5%, while Birmingham recorded a rise of 5.4%.
Property investors shifting focus
A spokesperson for easyMoney explained that rising interest rates have made property purchases more expensive, reducing market demand and slowing price growth in some areas. However, savvy investors have pivoted to cities showing strong price increases, particularly in Yorkshire.
“While cities like London and Manchester have struggled, property investors have capitalised on growth in cities like Sheffield and Bradford. The most astute investors have been quick to shift their focus to these booming markets,” the spokesperson said. Despite the overall cooling of the UK housing market due to rising interest rates, there are still key investment opportunities, particularly in northern cities. Sheffield, Bradford, and Leeds have emerged as the top performers, offering strong returns for property investors willing to adapt to changing market conditions.
