Our guide to investing in UK property in 2026

February 25, 2026

The UK residential property market is a resilient, reliable investment choice that is popular with investors from around the world. Demand is up, and construction rates are low. Property values and rents are both growing strongly, and the market is at the beginning of a new property cycle.

As we look ahead, 2026 is the ideal time to buy UK property and maximise your return on investment.

‍

Why invest in UK property?

UK property has proven its resilience amid economic uncertainty and has emerged on the other side with even greater growth potential. There are not enough homes to go round in the UK – we have just 446 homes per 1,000 people, the second lowest rate in Europe. This compares to 560 in France, 516 in Germany and a European average of 542.

Overall, we will need to build 565,000 homes per year by 2040 to close that gap. If we carry on at the current rate, we will not reach today’s European average until 2115.

For property investors, that means the fundamental facts of the UK’s housing market will remain in place:

Lack of supply in the market
Overwhelming demand fuelled by population growth
More competition means more capital appreciation
Lack of homes to buy leads to more rental competition
Rents are forecast to keep going up

‍

How fast are house prices and rents rising in the UK?

2025 was a year of growth fuelled by an improving economy and cheaper mortgage rates. The average UK house price passed £300,000 for the first time in January 2026, according to the latest Halifax data. That is a growth rate of 0.7% month-on-month, the fastest since November 2024.

In the future, Nationwide is predicting average property value growth of up to 4% this year, and Capital Economics predicts 3.5%. These are strong numbers and significantly higher than the 2025 forecasts.

In the longer term, the latest forecasts from Savills show we can expect average property value growth of 22.2% by the end of the decade.

Rents in the UK are on a similar positive trajectory. The HomeLet Rental Report from Q1 2026 shows the average UK rent (excluding London) increased by 2.1% over 2025 - building on historic highs. During COVID, rents in many parts of the country were increasing by between 12% and 20% a year. They have not retreated in the years since, so investors are able to profit from historically high rents, which are still going up.

In the future, Savills has forecast that rents will continue growing due to:

A shortage in the supply of new homes for sale.
Low construction rates are constraining the pipeline of new homes in the future.
The positive lifestyle benefits of renting.

In total, the agency forecasts average rental growth of 12% by 2030. That is great news for investors, and there is even more potential for rental growth in markets like Manchester and Liverpool.

‍

Where to invest in 2026?

With demand higher than ever and both house prices and rents continuing to grow, 2026 is a great time to invest in UK property and maximise your potential returns – but where are the best markets? Investors should look for:

Fast-growing populations
Lack of premium rental accommodation close to the city centre
Massive regeneration projects are underway
Growing economies
Great connectivity and public transport
World-class universities which attract students from around the world
High-end job opportunities for young professionals
Outstanding lifestyle

Two examples of locations with all these attributes can be found in the North West, the UK’s fastest-growing region.

‍

Invest in Manchester property 2026

Manchester is one of the best property investment locations in the UK. A world-famous culture, outstanding lifestyle and convenient connectivity to the rest of the country and the world makes it a great place to live. Manchester investment highlights include:

27.6% - Projected house price growth in the North West by 2030 (Savills)
18.8% - Projected rental growth in Manchester by 2029 (JLL)
100bn – Size of Greater Manchester economy (Manchester City Council)
2.2% - Economic growth in Manchester annually to 2027 (EY)
80,000 – Population growth 2021-2030 forecast (Census)

‍

Invest in Liverpool property 2026

Liverpool’s place on the River Mersey makes it a uniquely beautiful spot along England’s North West coast. The city’s waterfront, history and culture have been drawing people here for centuries. However, there’s much more to Liverpool than just being a place to visit for the weekend. It is also home to world-class universities, a strong economy, desirable employment opportunities, high-class retail and much more that makes it one of the most vibrant cities in the UK – and one which is an incredibly popular place to live. Investor highlights for Liverpool are:

8.5% - House price growth in Liverpool in 2025 (Office for National Statistics, Q1 2026)
7.5% - Rental growth in Liverpool in 2025 (Office for National Statistics, Q1 2026)
45,000 – Expected population growth by 2034 (Liverpool City Council)
£10bn growth plan underway (Liverpool Combined Authority)
20,000 new jobs and 25% increase in FDI targeted (Liverpool Corporate Plan)

‍

How to invest in property in 2026

Investing in the UK has never been easier, and this is the perfect time to do it. The first step to securing your next investment is to contact our team today.

Our guide to investing in UK property in 2026

You may also be interested in...

Is Manchester's success story one that can be copied?

Is London still the best UK market to invest in?

New record reached for average UK house prices