Top Cities for Rental Yield in the UK in 2025
Top Cities for Rental Yield in the UK in 2025
As we get closer to the half way mark of 2025, there have been a lot of changes in the rental landscape in the UK, some of which were known before the start of the year, with other factors impacting more recent changes.
With considerations like the Renters’ Rights Bill and the upcoming proposed EPC changes, it’s a time of change for many landlords, and in some cases, that might mean reassessing their portfolio. Be it investing further into areas that have performed well previously, or exploring new areas to consider, there’s a lot going on in the rental space right now.
An announcement in the past couple of days from the government of the relocation of thousands of civil service jobs to regions outside of London, and all across the UK, will also no doubt prompt increase rental demand in those cities specifically chosen for this initiative.
New landlords are always entering the marketplace, and the competition for the best place to buy rental properties remains high, as always.
We’ve put together a summary of what the top five cities for rent look like in the UK in 2025, considering both the tenant experience and motivation, which is a key driving factor for areas becoming rental hotspots, as well as rental yield for landlords.
Think Outside London
While London remains a magnet for capital investment, savvy investors are increasingly turning to regional cities for one key reason: rental yield.
Rental yield; the annual rental income as a percentage of the property's value, is a crucial metric for evaluating property investment performance. The higher the yield, the better the return. Below, we’ll explore the top five UK cities offering the highest average rental yields in 2025 (based on end of year insights from 2024, going into 2025), along with why these cities are so appealing for property investors.
1. Sunderland – Average Yield: 8.5%
Why It’s a Hotspot:
Sunderland consistently ranks among the highest-yielding cities in the UK, and 2025 is no different. With property prices still well below the national average and strong rental demand from both professionals and students, the city remains a reliable performer.
Appeal for Landlords:
Affordability: The average house price in Sunderland hovers around £110,000–£120,000, making it ideal for first-time or portfolio investors.
Student Population: The University of Sunderland supports a vibrant student rental market.
Regeneration Projects: Ongoing developments, including the Riverside Sunderland masterplan, are injecting new life into the local economy, driving demand for rentals.
2. Liverpool – Average Yield: 7.8%
Why It’s a Hotspot:
Liverpool remains a favourite among investors thanks to a powerful mix of relatively low house prices, strong rental demand, and a growing economy driven by its tech, education, and tourism sectors.
Appeal for Landlords:
Economic Growth: A £14 billion economy and growing investment in business districts and creative hubs.
High Tenant Demand: Large student population across the University of Liverpool, Liverpool John Moores, and Liverpool Hope University.
Cultural Capital: Liverpool’s status as a cultural and sporting hub fuels demand from young professionals and short-term renters.
3. Bradford – Average Yield: 7.6%
Why It’s a Hotspot:
Bradford is becoming one of the most overlooked yet lucrative cities for landlords. With its recent win as UK City of Culture 2025, it’s undergoing a renaissance that’s boosting its appeal to renters.
Appeal for Landlords:
Rising Tenant Demand: Affordable rents and proximity to Leeds attract renters looking for value.
Cultural Spotlight: The City of Culture designation brings £30 million in funding and has catalyzed regeneration in arts, business, and public infrastructure.
Transport Links: Strong rail connections to Leeds, Manchester, and London enhance its commuter appeal.
4. Manchester – Average Yield: 7.4%
Why It’s a Hotspot:
Manchester is a perennial favourite for property investors, and for good reason. It combines capital growth potential with solid rental yields, thanks to high rental demand across all demographics. The government’s recent announcement of the relocation of thousands of civil service jobs to cities outside of London, including Manchester, which will house the new Government Digital and AI Innovation Campus will no doubt increase the demand for rental properties in the area.
Appeal for Landlords:
Massive Rental Demand: One of the UK’s fastest-growing populations, especially among 20–35-year-olds.
Booming Economy: A tech and financial services hub outside London, Manchester continues to attract high-paying jobs.
Student Market: Over 100,000 students with low university accommodation supply supports long-term rental demand.
5. Hull – Average Yield: 7.3%
Why It’s a Hotspot:
Hull flies under the radar but delivers high returns. It’s among the most affordable cities in the UK, which boosts rental yields relative to property prices.
Appeal for Landlords:
Affordability: Average house prices around £115,000 make entry into the market accessible.
Growing Tenant Pool: A steady demand from young professionals and students attending the University of Hull.
Infrastructure Investment: Local authority-backed regeneration projects continue to enhance appeal.
Bonus Mention: Aberdeen - Average yield between 5.5 - 7.45%
With the Government announcement of Aberdeen becoming the new home of the Energy Campus, there will be an increased demand for rental properties in the region. Aberdeen already offers higher yields on average than other Scotland locations, with the University of Aberdeen, and the local industrial landscape increasing demand.
Why Rental Yield Still Matters in 2025
While capital growth has been a focus for many UK investors over the last decade, rental yield remains a critical factor—especially in today’s higher interest rate environment. A solid yield can offset financing costs and ensure cash flow remains healthy. For landlords and property managers, this translates into less financial stress and greater long-term profitability.
Here are a few reasons why the cities listed above remain especially promising in 2025:
Strong Local Economies: All five cities are benefiting from growth in education, healthcare, digital, or public sector jobs.
Increased Tenant Demand: The cost-of-living crisis has kept many would-be homeowners in the rental market, driving up rents.
Regeneration and Investment: From Sunderland’s riverside developments to Bradford’s cultural transformation, these cities are seeing serious investment that attracts both renters and buyers.
Tips for Landlords Looking to Invest in 2025
If you're considering expanding your portfolio this year, here are a few practical tips to get the most out of your investment:
Look Beyond London: The best rental yields continue to be found in the North and Midlands. Don't overlook smaller cities with strong fundamentals. The Government’s recent announcement to relocate civil service roles across the UK is also a signal of things to come that offer new opportunities in the rental landscape.
Understand Your Market: Each city has unique tenant demographics: students, professionals, families. Tailor your property type and furnishing accordingly.
Factor in Ongoing Costs: Maintenance, letting fees, and void periods can affect your net yield. Plan for contingencies.
Check Local Licensing: Some areas, like Liverpool and Manchester, have landlord licensing schemes or Article 4 directions that affect HMOs. Know the schemes for the area you’re considering investing in.
Work with Local Agents: If you don’t want to manage your property portfolio yourself, property managers with in-depth local knowledge can help maximise rental income and reduce voids.
Final Thoughts
As we continue through 2025, the UK rental market remains full of opportunity, especially for landlords willing to look beyond the traditional hotspots. Sunderland, Liverpool, Bradford, Manchester, and Hull are delivering some of the highest rental yields in the country, backed by strong tenant demand and regional growth.
By choosing cities with robust economic foundations, rising rental demand, and property affordability, landlords can position themselves for solid returns in both income and capital growth. Whether you're a hands-on landlord or managing a growing portfolio through agents, these five cities deserve a spot on your radar.
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