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The UK residential property market is increasingly being shaped by local dynamics, with regional differences becoming more pronounced across rental growth, house price performance and investment appetite. Therefore, it is not sufficient for investors to rely on national headline figures as doing so ignores the regional disparities that complete the full picture. It is also important for lawyers to advise clients through a regional as well as national lens to provide tailored advice relevant to the area in which the development or deal is taking place.
Rental market
In the rental market, the North East and North West continued to record the strongest annual growth at 4.4% and 3.3% respectively, as of April 2026. While the West Midlands recorded the weakest annual growth, at 0.6%. In the North West, this strong performance reflects stronger rental growth in more affordable areas, including Allerdale (16.7%) and Eden (13.1%), as well as urban markets such as Liverpool (3.9%). By contrast, reduced demand in urban markets in the Midlands has contributed to rental falls in Birmingham (-1.5%) and Nottingham (-2.0%).1
House prices
The regional divide is also evident in house prices. The North West and Scotland recorded the greatest price growth, based on January house price data, while the weakest growth was seen in parts of London.2
In Q1, available stock increased more generally. In London, stock was up 16% year-on-year, while the South East recorded a 9% increase, reflecting a greater carry-over of unsold homes from the end of 2025. That additional supply has held back house price growth in London and the South East, with prices over the past year lower by up to 1% in some southern markets. Elsewhere, supply levels were broadly unchanged year-on-year, supporting more resilient pricing, with house prices up by as much as 3% in the North West.3
In the near term, national house price growth is therefore likely to remain in low single digits, with more affordable regional markets continuing to outperform and London and the South East seeing slower, more price-sensitive progress.4
Investment appetite beyond London
London continues to attract strong demand, but cities such as Birmingham, Manchester, Leeds and Liverpool have benefitted from increasing investment over recent years.5
This shift reflects a combination of factors. Regional population growth, particularly in the North, investment in infrastructure and increasing job opportunities have all helped make cities outside London increasingly attractive to investors. Affordability is also key: for investors seeking financially resilient options, the high cost of living in London compared with other UK cities encourages a wider regional focus. Lower entry prices in regional cities can make acquisitions more accessible, while public investment in transport links and regeneration projects, including Victoria North in Manchester, has supported a case for investing ahead of further price growth.6
Certain areas also offer higher rental income relative to purchase price. Birmingham, Manchester, Leeds and Liverpool each have multiple universities, bringing large student populations into those cities each year, many of whom remain after graduating to work in those cities.7 This is likely to support higher demand for rental properties and, in turn, upward pressure on rents.
Renters’ Rights Act
From 1 May 2026, the Renters’ Rights Act (the “Act”) came into force. This adds another layer of uncertainty for investors and is another factor to consider.
The Act will also affect different regions differently. For example, landlords can now only raise rent once a year and renters can challenge unfair increases.8 Any rent increase must be no higher than the open market rent.9 Therefore, a landlord would not be able to increase rent in a region where rent levels are falling and they would not be able to increase it higher than the market rent level which means regional differences in rental growth will affect landlords directly and not just when they first let out their properties.
What we can offer you
Our Real Estate team will offer you tailored advice relevant to the area you are interested in. With extensive sector and legal knowledge, we can ensure you stay abreast of the regional changes affecting the UK residential property market and advise you on how that interacts with regulatory changes, such as the Renters Rights Act.
Find out more
Want to know more about how our real estate team are supporting clients to adapt to regional divergence in the residential property markets? Discover the whole range of services our expert team offer on our Real Estate page.
To read more about the topics covered in this blog, visit the following webpages:
- Ministry of Housing, Communities & Local Government – The Renters’ Rights Act Information Sheet 2026
About the author(s)
Annie Doe is a Trainee in Gowling WLG's Birmingham office.