A new wave of regional cities is becoming the focus for property investors with research by West One Loans showing strong growth in rental yields outside the traditional centres of London, Birmingham and Manchester.
The lender examined house prices and rental market data across 63 of the UK’s largest towns and cities, comparing estimated yields in 2025 with those recorded in 2023. The findings reveal that while Glasgow continues to offer the highest average yields overall, the sharpest growth has been in Ipswich, Leicester and Portsmouth.
Ipswich has seen the strongest increase, with yields rising from 4.1% in 2023 to 5.2% in 2025 – an uplift of 1.1 percentage points. Leicester follows with a 1.0 percentage point gain to 5.3%, while Portsmouth has climbed 0.9 percentage points to reach 6.3%.
Other cities seeing similar momentum include Norwich, Exeter, Reading and Southampton, where yields have grown by around 0.9 percentage points in the last two years.
A CHANGING MAP FOR LANDLORDS
The data highlights a shift for landlords, who are now able to access stronger returns in places where property remains comparatively affordable and rental demand is rising. This trend is being fuelled not only by the relative value of housing stock but also by the effect of ongoing regeneration schemes that are transforming many of these markets.
Thomas Cantor, co-head of short-term finance at West One Loans, says: “It’s fair to say that Birmingham and Manchester are no longer second cities and are now on a similar footing to London when it comes to investment, regeneration, and popularity, not just for residents, but also for property investors.
“However, high demand and rising property prices mean initial investment costs are significant.
“This has created an opportunity for a new wave of second cities, where investors can access more favourable deals and benefit from strong yield growth, particularly when using specialist finance solutions to support urban regeneration and property investment projects.”
REGENERATION BOOST
The rise of these second cities is being underpinned by large-scale urban regeneration projects, many of which are designed to attract new residents, improve infrastructure and stimulate local economies.
As these developments take shape, they bring with them both immediate and long-term opportunities for estate agents.
Higher rental yields can draw new investors into markets that may have previously been overlooked, boosting demand for both sales and lettings services.
At the same time, regeneration tends to improve the overall attractiveness of an area, creating opportunities for agents to market homes to owner-occupiers as well as investors.
