Are international investors shifting their focus away from London?

London is the traditional destination for international investors seeking to purchase UK investment property. The capital has historically delivered the strongest house price and rental growth – but is that the case anymore?

International investors are increasingly looking elsewhere to find the best returns on buy-to-let property in the UK in 2025. In this article, we have examined:

• How London’s property market has changed
• Rental yields in the North have surpassed those in London
• Future property price growth in the North is higher than in London
• Best value for money and returns found in the North of England

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How has London’s property market changed?

The London market isn’t what it used to be. Since the turn of the millennium, the average house price in the UK has gone up by 242.8% according to Savills. In London, that figure is much higher at 357%. In some boroughs, such as Walthamstow, prices have increased by up to 652% since the year 2000.

However, that growth has largely been and gone. In the last 12 months, house price growth in London has been just 2.2% according to the Land Registry. Combine that with the extremely high price of buying property in the capital, and you are spending a lot of money for relatively little reward.

In other words, while London might still be a prestige market, it is in many ways no longer a performance market. For investors who want the highest returns and portfolios that prioritise growth, it is time to look elsewhere.

That’s especially true for overseas investors who don’t have family or emotional ties to London like domestic investors who may be more reluctant to move their money out of the capital. None of that applies to international buyers who can follow the highest returns more easily.

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Rental yields in the North are far higher than in London

London is also falling behind when it comes to rental yields. This is an important concern for many overseas investors who are buying UK property to supplement their income.

Recent data from Paragon Bank shows that the average UK rental yield is at a 14-year high. The national average figure of 7.11% is now higher than at any time since February 2011. Unless you’re in London, in which case your average rental yield is just 5.78%.

That’s significantly lower than Yorkshire and the Humber (7.97%), the North as a whole (7.94%) and the North West (7.85%) – all of which beat London by a lot.

If you’re motivated by maximising your income over everything else, it is very clear where you can find the highest returns in the UK. It’s not in London anymore. Instead, locations like Manchester and Liverpool are a much better prospect for overseas investors.

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Future property price growth is much higher in the North than in London

It’s not just rents where London is falling behind; it’s also future house price growth. The latest house price forecast from Savills shows just how much London investors will miss out on in the next four years.

By the end of 2029, the agency has predicted the following average growth in property values:

• UK – 24.5%
• London – 15.3%
• North West – 31.2%
• Yorkshire and the Humber – 28.2%
• North East – 26.4%

Overseas investors who buy in London now could be making almost 10% less than the UK average capital appreciation in the next four years. In contrast, anyone who buys Manchester property or invests in Liverpool buy-to-let property will be making over twice as much profit as overseas investors in London.

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Best value and returns found in the North of England

London may have the prestige, but the North of England offers superior rental returns and capital appreciation. That’s especially true for international investors who are moving their money out of London to maximise their return on investment.

More growth is coming in the next four years, making this the perfect time to shift your focus to Northern property markets like Manchester and Liverpool. These cities are growing fast and offer a stronger return on investment for investors from around the world.

Want to learn more about the UK market and where is the best place to invest? Read our latest UK property market insights and then contact our property experts to start the search for your next UK buy-to-let investment today.