Are you an investor looking to tap into the short-term rental market? You’ll want to know which cities offer the best returns. With tourism booming and more travellers opting for short-term rentals, now is a great time to widen your portfolio.
In this guide, we highlight some of the most profitable locations in the UK for short-term rental investments. These cities not only attract a steady stream of tourists but also have thriving local economies, large student populations, and growing demand for short-term stays. Whether you’re a new or a seasoned investor, we’ll show you where to focus your efforts. Let’s jump in.
1. Manchester
- Average Property Price: £251,000
- Average Monthly Rent: £1,266
- Annual Rent Growth: 11.4%
- Average Rental Yield: 7.0%
Why Invest in Manchester?
First on our list is Manchester, a thriving metropolis known for its contributions to music, sports, technology, and education. Whether you’re considering a buy-to-let property or looking to cash in on the Airbnb market, this Northern powerhouse ticks all the boxes. It’s a city buzzing with energy and culture, and, most importantly — its property market is booming.
Rental Market Potential
Manchester is a city that draws millions of visitors each year, whether they’re coming to catch a Premier League game at Old Trafford, a gig at the iconic AO Arena, or to soak up the city’s roaring nightlife. Tourists, business travellers, and Mancunians alike are always on the lookout for well-located, comfortable places to stay. And with over 100,000 students at its popular universities, there’s no shortage of demand for student digs either.
Investment Considerations
With so much happening, Manchester is a top choice for property investors. The regeneration projects underway are transforming the city, driving up demand for homes and boosting rental yields. The best part? Manchester’s property prices remain much lower than those in cities like London, yet the rental yields can reach impressive levels, often averaging around 7%.
Speaking of returns, that’s where Alesco comes in — we’ve got a range of high-yield investment opportunities across the city, in some of Manchester’s most popular areas as well as hidden gems.
2. Liverpool
- Average Property Price: £186,000
- Average Monthly Rent: £801
- Annual Rent Growth: 8.4%
- Average Rental Yield: 7.44%
Why Invest in Liverpool?
Liverpool is a city full of character, history, and immense potential. With its maritime heritage and iconic music scene, it offers plenty to admire. But it’s not just the culture that’s thriving — Liverpool’s economy is experiencing significant growth, making it an increasingly appealing destination for property investors. Major developments, such as the £5.5 billion Liverpool Waters waterfront project, are reshaping the city and fueling its continued expansion.
Rental Market Potential
While it may not always be in the spotlight, Liverpool is quietly emerging as a prime destination for investment for both immediate returns and long-term growth. The mix of students, young professionals, and families creates a strong demand for rental properties, particularly in the thriving city centre, making it an increasingly attractive option for savvy investors.
Investment Considerations
Liverpool is embarking on a bold £14 billion regeneration project to reshape the city into a hub for property investment. With an additional £120 million from the Local Finance For Growth Fund, Liverpool’s ambitious five-year plan includes a stunning new stadium for Everton FC, state-of-the-art TV and film studios, 10,000 new homes, and even a new cruise terminal. This transformation has created a surge in demand for buy-to-let properties, with Liverpool postcodes offering rental yields of around 7.44%.
If you’re seeking exceptional investment opportunities, explore Alesco’s range of buy-to-let properties in Liverpool. And if you’re keen to discover some of Liverpool’s hottest investment hotspots, check out our article here, where we highlight some of the city’s hidden gems — areas on the rise with great growth potential.
3. Leeds
- Average Property Price: £247,000
- Average Monthly Rent: £1,100
- Annual Rent Growth: 4.6%
- Average Rental Yield: 6.67%
Why Invest in Leeds?
As many Loiners will undoubtedly agree, Leeds is one of the UK’s most exciting cities right now, and it’s easy to see why it’s becoming hugely popular for investors. The city is a vibrant mix of history, culture, and modern growth, offering huge potential for both buy-to-let investors and those looking to tap into the short-term rental market. But what sets Leeds apart is its status as a luxury retail destination — thanks to shopping areas like the stunning Victoria Quarter. With its lavish arcades, this upscale shopping district is home to some of the world’s top designer brands, making Leeds a major retail hub that draws affluent locals and tourists alike.
Rental Market Potential
Leeds has become a magnet for young professionals in finance, technology, legal services, and healthcare sectors. The Leeds City Region is the largest legal and financial services centre outside London, with major offices from Sky, BT, and KPMG. Popular areas for young professionals include the City Centre, Leeds Dock, and South Bank, which is undergoing regeneration, offering easy access to offices, bars, restaurants, and cultural attractions.
With over 60,000 students combined at the University of Leeds, Leeds Beckett University, and Leeds Trinity University, the city is a major centre for student accommodation. Areas like Hyde Park, Headingley, and Woodhouse are popular due to their distance from universities and vibrant social scenes.
Leeds also thrives in short-term lets, attracting millions of visitors each year for events like Leeds Festival, Leeds International Film Festival, Leeds Pride, and tourists visiting landmarks like the Royal Armouries Museum and Leeds Art Gallery.
Investment Considerations
Leeds is a city with real investment potential, especially if you’re thinking of short-term rentals. Areas like the City Centre, Leeds Dock, and the iconic Call Lane are all in strong demand thanks to their mix of shopping, culture, and nightlife.
The rental yields in Leeds are some of the highest in the UK, with rates often hovering around 6.67%. Property prices remain affordable compared to cities like London or Manchester, offering a great opportunity for investors to secure properties at a lower cost while still benefiting from strong returns.
The city is also experiencing significant regeneration, particularly around Leeds Dock, which is attracting new businesses and young professionals. With a large student population and solid transport links, Leeds offers consistent demand for both long-term and short-term rentals, making it a smart choice for investors looking for growth and high yields.
4. York
- Average Property Price: £327,000
- Average Monthly Rent: £1,104
- Annual Rent Growth: 9.3%
- Average Rental Yield: 5.22%
Why Invest in York
York is a city simply like no other. Packed with history, charm, and character, it’s no surprise that it’s one of the UK’s most sought-after places to live — and invest. Whether you’re eyeing up a buy-to-let property or thinking about cashing in on the Airbnb market, York offers a unique mix of timeless appeal and modern growth.
Rental Market Potential
Investing in York is a smart choice. The city is home to many renters — from young professionals and families to expats and the thousands of students attending the University of York and York St John University. There’s always demand for good-quality rental properties, especially in well-connected, central areas. And with York’s job market growing across industries like tourism, education, and healthcare, you can count on a steady stream of tenants.
Investment Considerations
York is also a goldmine for short-term rentals. With its stunning landmarks like York Minster — one of the world’s most magnificent cathedrals, the Shambles — one of the best-preserved medieval shopping streets in Europe, and Clifford’s Tower — the largest remaining building of York Castle, the city draws millions of visitors every year. Whether people come for a weekend getaway, a historic tour, or one of York’s famous festivals, they all need a place to stay. This makes it an ideal location for short-term rentals that can reap the benefits of the booming tourism sector.
When it comes to rental yields, York offers strong returns, especially for short-term rentals. With high demand throughout the year, investors can often expect rental yields in the region of 5.22%, making it a lucrative city for those looking to benefit from the popularity of short-term stays.
5. Preston
- Average Property Price: £224,000
- Average Monthly Rent: £650
- Annual Rent Growth: 3.3%
- Average Rental Yield: 7%
Why Invest in Preston
Preston might not be the first city that springs to mind when you think of investment hotspots, but it’s worth giving it a second look. This Lancashire city is a real hidden gem, offering a mix of history, modern amenities, and strong investment potential.
The city’s rental market is booming, thanks to a growing student population from the University of Central Lancashire (one of the UK’s fastest-growing universities), and a diverse range of employers. Whether you’re looking for long-term tenants or short-term lets, Preston has a lot to offer.
Rental Market Potential
Preston is far more than just a student city, however. With its proud history and modern ambitions, it’s attracting a broad range of renters, including students, young professionals, and families.
But it’s not just students — the city’s ongoing redevelopment is creating demand for high-quality homes across all demographics. The rental market is thriving, particularly in areas like the city centre, where new developments and excellent transport links are making Preston one of the best-connected cities in the North.
Investment Considerations
With its blend of rich history, modern developments, and vibrant culture, Preston is fast becoming the perfect place for property investors. Whether you’re looking to invest in Preston’s long-term rentals or tap into the growing Airbnb market, Preston offers something special.
The city is still a bit of a hidden gem, but it’s becoming a popular spot for short-term stays, especially due to its proximity to the Lake District and the Ribble Valley.
As tourists increasingly seek out convenient, stylish Airbnb properties to explore Preston’s attractions, the demand for short-term rentals is growing. With rental yields of around 7%, Preston presents a great opportunity for investors looking to tap into the booming short-term rental market.
6. Hull
- Average Property Price: £144,000
- Average Monthly Rent: £614
- Annual Rent Growth: 8.5%
- Average Rental Yield: 7.45%
Why Invest in Hull?
Closely behind Preston is Hull. This port city might be humble in personality, but it’s rich in investment opportunities, making it sixth on our list of investment hotspots. This up-and-coming city is offering a valuable chance for investors to get in early before the full benefits of its regeneration projects — valued at over £96 million — take shape.
Known for its maritime history and a cultural renaissance since being the UK City of Culture between 2013 and 2017, Hull is steadily evolving into a bit of a hot spot for both long-term buy-to-let properties and short-term rentals.
Rental Market Potential
Hull is steadily making a name for itself as a great place to live. With a diverse population, it attracts young professionals, students, and families looking for affordable housing, strong community vibes, and a city with a real sense of character. Hull’s young professionals are drawn to the city’s growing digital, maritime, and healthcare sectors, while students flock to the University of Hull, making the city a mix of cultures.
Investment Considerations
Hull offers a range of property types for buy-to-let investors. From snug terraced houses to sprawling modern apartments, the options are plentiful. Whether you’re targeting students near the university or families on holiday, Hull has a property type to suit your investment goals.
Plus, property prices in Hull are still some of the most affordable in the UK, making it an attractive option for first-time investors or those looking for better value for money. The average price of a home in Hull is significantly lower than in cities like Leeds or Manchester, allowing for high rental yields, typically hovering around 7.45%, and room for future growth.
7. Warrington
- Average Property Price: £255,000
- Average Monthly Rent: £802
- Annual Rent Growth: 1.0%
- Average Rental Yield: 7.5%
Why Invest in Warrington
Warrington is quietly emerging as a property investor’s dream. Sitting snugly between Manchester and Liverpool, it offers investors the best of both worlds: access to two thriving cities while maintaining its strong sense of identity.
The town is proud of its roots and has a resilient spirit, embodied by the alpha Warrington Wolves, the town’s beloved rugby league team. Their success on the field reflects the community’s ambition and pride, helping to put Warrington on the map.
Rental Market Potential
With its affordability compared to Manchester and Liverpool, Warrington attracts tenants who want more space and value for their money. Areas like the town centre are perfect for young professionals who need great transport connections, while suburbs like Great Sankey and Birchwood are popular with families.
Rental yields in Warrington are highly competitive, often outperforming bigger cities in the North West. As regeneration projects continue, tenant demand is only expected to grow, making now the perfect time to invest in a buy-to-let property.
Investment Considerations
With over £1 billion of regeneration projects in progress, Warrington is transforming into a hotspot for long-term investment. The Packet House corner is set to become a sleek six-story apartment block with shops below, while housing projects like Rivers Edge and plans for Omega South are adding hundreds of new homes. Cockhedge Shopping Centre is being revamped with apartments, a hotel, and business spaces. Even old Fiddler’s Ferry is getting a second life with industrial and residential plans.
Add to this its excellent transport links, including the M6, M56, and M62 motorways, and it’s easy to see why Warrington is becoming a firm favourite for commuters and families looking for affordability and accessibility.
In addition to these exciting developments, Warrington offers strong rental yields of around 7.5%. The town’s continued growth, coupled with its affordable property prices, makes it an attractive investment option.
8. Stoke-on-Trent
- Average Property Price: £147,000
- Average Monthly Rent: £625
- Annual Rent Growth: 8.7%
- Average Rental Yield: 7.38%
Why Invest in Stoke-on-Trent
Number eight on our list is Stoke-on-Trent, often abbreviated to just ‘Stoke’. Once the epicentre of the global pottery industry, Stoke is still home to iconic names in English fine china like Wedgwood, Spode, and Royal Doulton, and its legacy in ceramics is proudly celebrated by Stokes both young and old. Stoke’s cultural charm, coupled with ongoing regeneration projects, makes it an increasingly desirable place to invest.
Rental Market Potential
Tenant demand in Stoke is strong and diverse. The student population guarantees a consistent need for student accommodation, while young professionals and families also make up a large part of the rental market. With a range of affordable properties available, you will always find someone looking to rent, from single professionals to growing families.
Stoke is showing great promise for future rental growth. As the city continues to develop, with numerous regeneration projects in the works, it’s expected that rental prices will rise, especially in areas benefiting from the improvements. It’s an affordable alternative to bigger cities like Manchester or Birmingham, which makes it an attractive option for renters and investors alike.
Investment Considerations
Stoke-on-Trent’s Levelling Up agenda is intertwined with the city’s rich pottery heritage, and several key developments are shaping its future. One of the standout projects is the Spode Works redevelopment, which is transforming the historic Spode Pottery site into a vibrant mix of residential, retail, and leisure spaces. This project is set to preserve the city’s industrial legacy while introducing modern amenities, making it a prime location for investment. Another significant development is the Etruria Valley, which focuses on modern housing, green spaces, and commercial facilities.
These regeneration projects are helping boost rental yields in the area, with investors typically seeing around 7.38%. As demand for both homes and rental properties rises, Stoke-on-Trent offers a great opportunity for those looking for solid returns and long-term growth.
9. Luton
- Average Property Price: £274,000
- Average Monthly Rent: £1,128
- Annual Rent Growth: 10.6%
- Average Rental Yield: 6.08%
Why Invest in Luton
Last, but by no means least, we have Luton. Situated just 30 miles north of London in Bedfordshire, Luton is an excellent commuter town, boasting exceptional transport links, including a direct 23-minute train ride to London St. Pancras and easy access to London Luton Airport — one of the UK’s busiest airports. This makes Luton a popular choice for young professionals and families seeking more affordable housing options while maintaining convenient access to the opportunities of London.
Rental Market Potential
Young professionals and commuters are flocking to Luton for affordable housing options that still offer easy access to the capital. This high demand for rental properties, especially in areas near the train station, makes apartments in the town centre particularly attractive to investors. Families are also choosing Luton for its suburban feel, good local schools, and larger homes at more affordable prices compared to London.
Investment Considerations
Luton offers a range of property types ideal for buy-to-let investors, from apartments in the town centre, popular with young professionals and commuters, to family homes in suburban areas like Stopsley and Wigmore.
What makes Luton especially attractive is its ongoing regeneration efforts, including the bold new Masterplan to reimagine the town centre, promising to enhance residential, commercial, and infrastructure offerings and increase property values. Additionally, the ongoing expansion of London Luton Airport and the development of the Luton Direct Air-Rail Transit (DART) project are expected to drive further demand for housing, especially from those working in aviation and logistics, making Luton an attractive option for long-term investment.
Luton’s potential for long-term investment is undeniable, as rental yields typically hover around 6.08% This makes it a promising location for investors seeking both consistent income and capital growth.
Unlock High-Yield Property Investments with Alesco
The UK property market is full of opportunities for savvy investors looking to achieve strong rental yields and long-term growth. Whether it’s the energy Manchester brings, the up-and-coming appeal of Hull, or the charm of York, numerous cities stand out as top locations in the UK, offering great returns for both buy-to-let and short-term rental investments.
At Alesco, we specialise in sourcing affordable buy-to-let properties in some of these high-demand areas, ensuring you get the most out of your investment. If you’re ready to explore the opportunities in London, Manchester, and Liverpool, contact us today. We’ll help you start or grow your property portfolio with high-yield, affordable investments that will pay off for years to come.
Written by: David Jacobs
I specialise in working with high net worth investors across the globe that are looking to create and expand their existing property portfolio in the UK. I have close relationships with all my clients who trust the expertise and knowledge I have within the property industry. I also liaise with banks, receivers and some of the largest developers in the UK in order to source high yielding properties for my clients and to help ensure their long-term financial security.
