While the UK grappled with economic uncertainties and rising interest rates, three Yorkshire cities have emerged as the top performers in property investment returns while traditionally favoured areas like London, Manchester and Birmingham have lagged behind.
The Bank of England’s decision to raise interest rates in December 2021 to control inflation had a profound impact on the property market. Despite avoiding predictions of a market crash, house prices across the nation mostly stagnated. However, three cities defied this trend, offering significant returns for local investors.
According to new research, the three cities: Sheffield, Bradford and Leeds have shown remarkable resilience and growth during this period, becoming the new property investment hotspots in the challenging economic environment.
From December 2021 to May 2024, the UK average house price rose from £269,273 to £288,120, representing a modest 7 per cent increase. However, the 3 Yorkshire cities significantly outpaced this average. See the data below.
Yorkshire’s standout performers
- Sheffield leads the pack, with property prices climbing from £192,542 in December 2021 to £216,934 in May 2024, a substantial 12.7 per cent increase. Known for its industrial heritage, Sheffield has transformed into a vibrant urban hub, attracting both residents and investors.
- Bradford follows closely behind Sheffield, with a 10.3 per cent rise in property prices, moving from £158,562 to £174,930. This city’s ongoing regeneration and strategic location within West Yorkshire have bolstered the local property market.
- Leeds rounds out the top three, boasting a 10 per cent increase in house prices, which now average £231,743. As one of the UK’s largest financial centres outside London, Leeds continues to attract significant investment.
Further cities to have outperformed not only the national average but also other major UK cities are Newcastle (with 9.9% growth), Leicester (9.5%), Bristol (9.4%), Edinburgh (9.1%), Cardiff (8.8%) and Glasgow (8.7%), reflecting a broader trend of regional property market resilience.
Traditional hotspots struggle to keep up
Conversely, the data reveals that traditional investment strongholds have faced challenges. London and Manchester, two of the UK’s most popular investment destinations, have seen growth of just 2.3 per cent since December 2021. Brighton (4.5%) and Birmingham (5.4%) have also underperformed compared to their northern counterparts.
Jason Ferrando, CEO of peer-to-peer real estate investment platform easyMoney, which conducted the research, attributes these trends to the rising cost of borrowing, which has tempered demand in many parts of the country. However, he emphasised that the UK’s property market is highly fragmented where opportunities for property investors to make profits still abound. “As is always the case with the British housing market, even when the national picture shows muted growth, there are always corners and pockets where prices are rising at pace. In the past few years, the best of these pockets appear to have been Yorkshire cities. The best, most astute property investors are wise to the fact that when price growth stutters in one city, it will be booming in another, so a smart investor who normally invests in Manchester will have shifted their attention to Sheffield.”
For investors looking to navigate this complex landscape, it seems the key to successful property investment lies in understanding these dynamics and being flexible in your approach.
