Property investment remains one of the most popular ways to secure long-term returns, and the current market holds plenty of opportunities for would-be landlords if you know where to look.
Historically, investing in UK bricks and mortar has offered a reliable income and strong capital appreciation, making it an excellent option for people looking to put their savings to good use.
In recent years, investors have become more strategic in order to navigate the market, where higher house prices and interest rates have made it more difficult to get onto the investment ladder in certain locations.
More affordable areas and property types are increasingly becoming the go-to for new investors seeking maximum returns and minimal mortgage commitments, and places like Manchester, Birmingham, Liverpool and Leeds have all overtaken London when it comes to house price gains and rental yields.
First-time property investors in particular are likely to target these ‘up-and-coming’ locations, where returns can significantly outweigh other asset classes – and often prove less volatile than stocks and shares which can be more linked to investor sentiment.
Property investment for new buyers
According to new research from Market Financial Solutions, rather than be put off the more challenging landscape of affordability in the housing market, “millions” of adults are still keen to get into property investment.
The study found that one in three (33%) of UK adults have aspirations to invest in property, rising to more than half (54%) of 18-34-year-olds. Generally, the longer you own a property, the greater your returns, so investing as early as possible can lead to the best results.
To make this aspiration a reality, 52% of people have been setting money aside each month, while 44% have worked extra hours to boost their coffers. A further 33% said they were saving money by living with friends or family members, while 30% said they have asked or will ask for financial support from family to make their purchase.
For some, property investment goals come before homeownership: 24% said they would consider investing in a buy-to-let property before buying themselves a home to live in.
Breaking down barriers for first-time investors
Paresh Raja, CEO of Market Financial Solutions, points out that while “millions of Britons still have ambitions to invest in property and become a landlord”, the challenges that exist today have evolved compared with the barriers people faced a few decades ago.
This includes rising house prices compared with wage growth, which means a much greater chunk of people’s overall incomes now goes on paying for a property. It also means there is greater reliance on borrowing to buy – although buy-to-let mortgage products have been significantly enhanced over recent years.
However, buyers continue to adapt to the market in order to achieve their property investment goals. Paresh notes: “It’s so interesting to see the different financial strategies they are deploying to turn their ambitions into a reality.”
He points out that lenders can be less favourable towards first-time investors who do not already own a home, as they can be seen as a higher-risk borrower. “That’s just one example of the barriers first-time BTL buyers can face in the mortgage application process, which is why brokers play such an important role in connecting those individuals with lenders best placed to support.”
Strategic property investment
The UK housing market continues to demonstrate resilience and long-term growth, with forecasts predicting a 22.8% rise in property prices over the next five years.
Successful property investment relies on looking ahead and assessing how trends are expected to shape the prospects of particular locations. In recent years, the North of England has led the way when it comes to housing market performance, making it a favourite for property investment.
Read our guide to property investment strategies for 2025, and browse some of our current property investment opportunities here if you’d like to start building your portfolio.
