9:58 AM, 16th September 2025, 7 months ago
Britain’s property hotspots are shifting away from traditional favourites like London, Birmingham and Manchester, as a new set of second cities delivers the strongest rental yield growth.
According to West One Loans, which examined PRS data alongside house values in 63 urban centres across the country, it also compared 2025 yield projections with 2023 performance to identify areas of fastest growth.
While Glasgow remains the most lucrative location overall, Ipswich, Leicester and Portsmouth have recorded the most impressive increases.
Ipswich has seen yields climb from 4.1% in 2023 to 5.2% this year, a rise of 1.1 percentage points.
Leicester follows with a 1.0-point uplift to 5.3%, while Portsmouth has grown by 0.9 points to reach 6.3%.
Second city investment opportunities
The firm’s co-head of short-term finance, Thomas Cantor, said: “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.”
He added: “Whether you’re an experienced investor, or it’s your first time entering into the space, development finance is a key tool in your arsenal when it comes to moving with the speed and agility required to maximise on current market opportunities.”
Growing tenant demand
Other cities showing notable momentum in the analysis include Norwich, Exeter, Reading and Southampton, each registering improvements of around 0.9 percentage points.
Analysts point to a mix of rising rental demand and comparatively modest property values as the driving forces behind these gains.
The findings underline a shift in investment focus towards areas that combine affordability with healthy rental income, opening opportunities beyond the nation’s biggest metropolitan centres.
Also, regeneration projects and infrastructure development are helping to boost the appeal of these emerging markets.