With the UK property market continuing to show resilience, investors are looking ahead to 2026 to identify the locations with the strongest potential for both rental yields and capital growth. According to leading property consultancy Knight Knox, regional cities remain the standout performers, supported by regeneration, population growth, and strong tenant demand.
Manchester
Manchester continues to top the list for investment potential. The city’s economy is forecast to grow faster than the national average, while its large student and graduate population underpins one of the strongest rental markets in the country. Rental yields frequently exceed 6%, while ongoing regeneration projects, including the £1.5 billion Manchester Airport transformation, are driving long-term growth.
Liverpool
With significant waterfront regeneration and a thriving digital economy, Liverpool remains a key destination for investors. The city is known for its affordability compared to other UK cores, offering excellent entry points for first-time and portfolio investors alike. Yields of 6–7% are common, particularly in central apartment developments.
Birmingham
Birmingham is benefiting from billions in regeneration spending and the arrival of HS2. With one of the youngest populations of any major UK city, demand for high-quality rental property continues to rise. Rental yields average 5–6%, and capital growth prospects remain strong as the city attracts new businesses and talent.
Leeds
Leeds has established itself as the financial hub of the North, drawing in global firms and young professionals. Demand for rental accommodation is outpacing supply, particularly in the city centre. Investors can expect yields of around 5–6%, alongside long-term growth driven by its robust economy.
Sheffield
Once overlooked, Sheffield is emerging as an investment hotspot. Affordable property prices, a growing student population, and major regeneration schemes are fuelling demand. Yields of 6% and above are achievable in select developments.
Knight Knox’s View
As a specialist in UK buy-to-let property, Knight Knox emphasises the importance of targeting high-growth regional cities where rental demand is strong and regeneration is ongoing. Manchester, Liverpool, Birmingham, Leeds, and Sheffield stand out as the key markets for investors seeking reliable returns.
The UK property market remains a compelling option for investors, with regional cities offering some of the best opportunities. With expert insight and a proven track record, Knight Knox provides access to developments that are well-positioned to deliver both yields and long-term capital appreciation.
For more insights, visit Knight Knox.
Photo by Tejas kamble
