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Why Invest in UK property?

Investing in UK property is widely regarded as a secure, reliable, and profitable way to protect and grow wealth. Ignoring year-on-year or monthly trends, the UK property market has, on average, risen 4.3% every year since 2011. There are several ways to invest in UK property, including commercial, student, HMO, and residential. Residential buy-to-let is by far the most popular way to invest in UK property, followed by student and commercial property.

The fundamental conditions of the UK property market, namely a chronic lack of supply, mean that in at least the medium term, there is a wide expectation that prices will continue to grow steadily, but rental increases will rise more sharply as more people seek to enter the rental market.

The unusually high and rapid rises in house prices following the COVID-19 pandemic caused some to wonder whether we would see yearly rises of 10% to 20% more regularly, but the more realistic pre-pandemic levels of growth have returned. For investors, more sustainable house price and rental growth are desirable, and this seems to be the way the UK property market will continue to behave in the medium and long term.

Ultimately, compared to similar investment opportunities, UK property remains one of the most popular options for a good reason – the housing supply in the UK is nowhere near meeting the demand, meaning a consistent upward pressure on prices. Moreover, a significant increase in the number of renters in the market has resulted in a steady and robust increase in rents, providing a strong passive income compared to other investments.

How to Invest in Property:

There are various ways to invest in UK property, either through direct investment or mortgage or other lending. For buy-to-let investments in residential property, most landlords typically apply for specialist buy-to-let mortgages. These mortgages differ from standard domestic mortgages in that they usually require a higher deposit, and there is a more extensive range of interest-only mortgages available in the buy-to-let market.

In the student and off-plan property markets, it can be more challenging, if not impossible, to obtain such mortgages as they are more niche products with differing rules. As a result, purchasing with cash is predominantly the most streamlined and hassle-free method. If your capital is tied up in other areas, you may still be able to raise finance on these to fund a property purchase.

There are niche and specialist types of finance, such as bridging and auction finance, but these are usually short-term and have very high-interest rates, making them unsuitable for long-term property investment. Ultimately, if you have a sum of money you want to invest in property, it is advisable to speak to an expert, whether it is a property investment specialist or a financial advisor.

Where are the Best Cities to Invest in UK Property?


Considered by many as the UK’s second city after London, this hub of the North West has experienced an explosion of activity in the past 20 years, with significant development and regeneration. As a result, house prices and rents in Manchester have soared in recent times, and with three world-class universities in and around the city area, it’s one of the hottest areas for both residential and student property investment.

Investment property opportunities are plentiful in Manchester, not just in the popular city centre areas with high demand, but also in the surrounding boroughs where more people are settling in suburban areas with good access to the city.


Sheffield has a thriving economy, particularly in the advanced manufacturing, engineering, and creative industries. The city is also home to two major universities, which attract a large student population and provide a consistent demand for rental properties.

Moreover, Sheffield is an affordable city to live in compared to other major UK cities, which makes it an attractive destination for young professionals and families looking for affordable housing options.

Additionally, Sheffield boasts excellent transport links to other parts of the UK and a growing international airport, making it an accessible city for business and tourism. As a result, the demand for rental properties in Sheffield is constantly increasing.


Similar to Manchester, Liverpool is a popular destination for property investors due to its strong economic growth, cultural heritage, and vibrant lifestyle.

The city’s economy has experienced significant growth in recent years, with major investments in infrastructure, such as Liverpool Waters and the Knowledge Quarter, attracting new businesses and creating job opportunities. This has led to a growing population, increased demand for housing, and rising property prices.

Property Investment Types

Residential: This type of property investment is geared towards properties that are used for living purposes, such as apartments, flats, houses, and HMOs (House in Multiple Occupation). You can invest in residential properties through buy-to-let mortgages or finance, or buy them outright from new, through resale markets, or auctions. Auction properties are often sold “as seen,” so it’s recommended that only experienced property investors and renovators buy them.

Residential property investment is one of the most popular ways for property investors to enter the market, and it constitutes a majority of property ownership for buy-to-let or rental properties. Residential property is seen as the most reliable type of investment, as it has a high demand, a high likelihood of a price increase, and is perceived to have fewer risks.

Student: Student property investment refers to investing in properties marketed towards students, such as HMOs or Purpose-Built Student Accommodation (PBSA). PBSA are flats or apartments that are specifically designed for student accommodation. Student areas in cities such as Manchester, Liverpool, and Sheffield have many PBSA buildings, as well as residential properties converted into specialist student HMOs. Investing in student properties can be beneficial, as occupancy rates are typically high, and the rental income is usually higher as a proportion of the property’s value than in other asset classes.

Take a look at our guide to deciding between student or residential property here!

Alternatives: There are other forms of property investment, such as commercial, property bonds or ETFs, and holiday home investment. While these may be more niche, there is still a demand in these areas.

Holiday let investment, for example, has seen a surge in popularity since the pandemic. More people are choosing to holiday in the UK instead of going abroad, leading to a rise in demand and profitability in the sector. Commercial property investment has had mixed fortunes since the pandemic, with a delay in the return to office and a shift in the way people work. However, demand for good office space in prime areas has been steadily rising since the end of the lockdown and the return to normality.

ETFs and bonds are good ways to invest in the property market without direct ownership, but it’s recommended that you seek financial advice before making a decision on this type of investment.

Manchester Property Investment - EconomyThe economy for Manchester property investment

What Are the Risks Involved in Investing?

As with any investment, there are always risks involved and as such you should be aware of these before committing to an investment to be able to protect yourself.

Firstly, property values can fluctuate depending on market conditions and external factors such as economic conditions, interest rates, and government policies. Changes in these factors can impact demand for property, rental income, and property values, leading to potential losses for investors.

Secondly, the property isn’t a liquid asset, meaning that it may be difficult to sell quickly if an investor needs to raise funds. This can make it challenging to sell or change strategy if market conditions change.

You also need to understand that, depending on the type of property, investment requires ongoing maintenance and management, which can be time-consuming and costly. Property owners must be prepared to handle unexpected repairs, tenant issues, and other operational challenges that may arise unless they instruct an agent.

If you’re looking to finance your investment through specialist borrowing, it’s also important to understand that this can be impacted by economic conditions, interest rates and government policy too. If you take out an 80% mortgage, for example, and interest rates increase by 3% this can have a big impact on your income.

Overall, investing in property can be a lucrative opportunity for investors, but it’s important to consider the risks involved and conduct thorough due diligence before making any investment decisions.


Is UK property still a good investment?

This will depend on your circumstances, but in general, yes, UK property is still a good long-term investment. Prices tend to rise steadily over any given 5- or 10-year period, and as an asset, property provides an excellent passive income that’s hard to achieve in other sectors. There are, of course, risks involved as there are with any type of investment. However, aside from not being a very liquid asset, UK property represents some of the best returns of any investment.

Will house prices fall in the next 5 years?

We can’t predict the future; however, the UK housing market is influenced by a variety of factors, including the economy, interest rates, population growth, and government policies. In recent years, house prices in the UK have been on the rise, particularly in certain regions such as London and Manchester. That being said, the rate of growth during and directly after the pandemic was never likely to last, and many had hoped that 10-15% price rises would be the new norm. It may be the case that in 2023 prices fall slightly, but over the next 5 years, the widespread expectation is a return to more modest and sustainable increases of around 4% or 5%.

How much do I need to invest in UK property?

It will very much depend on the type of property you’re looking to invest in, as well as the area you’re considering and how you plan to finance it. For example, the average UK house price is around £260,000, but that fluctuates from the south to the north of the country, where houses in the northeast are cheaper. If you’re looking to invest in an off-plan apartment in Manchester, then you’ll probably need about £200,000, but if you want a student investment, then £50,000 may be enough. The best thing to do if you’re not sure is to seek advice from an expert.

Can foreigners invest in property in the UK?

Yes, there are no limits on foreign citizens investing in UK property, and you will be able to qualify for a mortgage too. There is a huge market for direct investment from foreign citizens, and cities such as Manchester, Liverpool, and London already see lots of property investment from abroad on a yearly basis.

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