UK Property Prices Surge to New Record High – But It’s Still a Great Time to Buy in the Right Cities

April 2025 has brought with it a new milestone for the UK housing market: property prices have surged to a record high, with the average UK home now priced above £295,000 according to the latest data from the ONS and Halifax. That’s a sharp increase from this time last year, signaling a strong rebound in market confidence and renewed demand from both homebuyers and investors.

Despite headlines focusing on rising prices, the real story lies beneath the surface. There are still excellent buying opportunities—especially in regional hotspots and selected parts of London where long-term growth potential remains strong.

Let’s break down what’s happening, and where buyers should be looking right now.

What’s Behind the Price Surge?

Several key factors have contributed to the upward pressure on UK property prices:

• Stabilising Interest Rates: With inflation easing and the Bank of England expected to begin cutting rates in the second half of 2025, more buyers are locking in mortgages ahead of expected increases in demand.

• Lack of Supply: The number of homes for sale remains limited, especially in high-demand urban centres, pushing prices higher.

• Resilient Rental Market: Rental prices continue to climb, driving interest in buy-to-let investments, particularly in student-heavy and commuter-friendly cities.

• Overseas Investment: A weak pound and stable UK political outlook are attracting foreign buyers, particularly into major cities.

Where the Smart Money is Going: Key Cities to Watch

Despite the nationwide price increases, several UK cities still offer excellent value, strong rental yields, and long-term capital growth potential. Here are four cities where it’s still a great time to buy:

1. Manchester

Manchester remains one of the UK’s strongest performing property markets. With ambitious regeneration schemes like Victoria North, an ever-growing student population, and expanding business hubs, demand continues to outstrip supply. Average property prices are still well below the UK average, but rental yields of 6–8% are common, especially in central and south Manchester.

2. Birmingham

The HS2 rail project is transforming Birmingham’s connectivity to London, and global firms like HSBC and Goldman Sachs are expanding operations in the city. With major redevelopment projects such as Smithfield and Paradise, the city centre is becoming a magnet for young professionals. Properties are relatively affordable, and yields remain attractive.

3. Liverpool

Liverpool is often overlooked, but it's quickly gaining attention for its high yields and low entry prices. With a thriving student market, growing tourism economy, and regeneration around the Baltic Triangle and Liverpool Waters, the city is positioning itself as a northern investment hub. Investors can still find one- and two-bedroom apartments under £150,000 with yields over 7%.

4. London

While traditionally expensive, parts of London are still undervalued, especially in outer zones and regeneration areas. The prime central market is seeing renewed activity from international buyers, while areas like Tottenham, Barking, and Woolwich are seeing major investment. For long-term capital appreciation, London remains a solid bet—especially with anticipated interest rate cuts reigniting demand.

Should You Wait or Buy Now?

With prices rising and interest rate cuts looming, waiting could mean paying more for the same property later in the year. For both investors and residential buyers, now is a pivotal time to get in before the next wave of competition drives prices further.

If you're targeting rental income, cities like Liverpool and Manchester offer compelling yields. If you're focused on long-term growth, London and Birmingham present excellent potential with regeneration-fueled appreciation.

Ready to take advantage of today’s opportunities? Let us guide you to the right UK property investment.

Contact us today for tailored property recommendations in Manchester, Birmingham, Liverpool, London, and beyond.

---

About the author:

Raj is a seasoned investment advisor with over a decade of experience in the offshore market, specialising in prime off-plan property developments across the UK. His broad expertise spans a variety of asset classes, yet it is his self-admitted passion for property that has refined his ability to spot exceptional developments and prime locations. Having lived and worked in diverse locations around the globe, Raj now enjoys the relaxed Mediterranean lifestyle on the coast of Southern Spain, where he resides with his wife. His global perspective and keen eye for investment opportunities make him an invaluable resource for expat clients.