Buckinghamshire, UK. October 27th 2025 – New analysis from LandlordBuyer suggests that the UK’s property market divide between North and South is set to widen further by 2026, as northern regions continue to outperform the South in both rental yield and price growth.
According to recent data, average property prices in the South of England are forecast to rise by around 1.5% in 2026, while northern cities such as Manchester, Leeds, and Newcastle are projected to see growth closer to 4.2%. This growing disparity highlights a shift in investment appeal, as landlords increasingly seek stronger returns in emerging regional markets.
The 2026 market snapshot indicates:
● 4.2% forecast price growth in northern cities (Manchester, Leeds, Newcastle)
● 1.5% forecast price growth in southern England, including London
● 7.0% average rental yields in the North West and Yorkshire
● 4.1% average rental yields in London and the South East
● 6.2% annual rent growth in the North West vs 3.1% in London
● 15% rise in landlords investing outside their home region since 2022
Jason Harris-Cohen, Managing Director of LandlordBuyer, says the figures confirm a clear trend among investors looking to diversify:
“We’re seeing a fundamental change in where landlords choose to invest. The North has become the engine room for yield-driven investors, supported by regeneration projects, affordable purchase prices, and resilient rental demand. London will always have prestige, but it’s no longer the only place where landlords can build sustainable portfolios.”
The wider economic backdrop for 2026 remains challenging but stable. Although inflation is expected to normalise, interest rates are likely to stay above 4%, which may suppress demand for high-value southern properties. In contrast, northern regions continue to attract buyers thanks to affordability, employment growth, and government-backed infrastructure projects such as the TransPennine Route Upgrade, Northern Powerhouse Rail, and city-centre regeneration in Manchester, Liverpool, and Leeds.
These projects are expected to boost both house prices and rental demand across key northern cities. Reports show that rents in the North West rose 6.2% annually in 2024, double the London rate, and early forecasts suggest this trend will continue into 2026.
As the North continues to outperform on yield and rental growth, 2026 could mark the year the traditional investment map of the UK is redrawn. Southern markets may stabilise, but the North’s combination of affordability, infrastructure spending, and rental resilience positions it as the top destination for yield-focused landlords.
ENDS