London has re-emerged as the UK’s most attractive region for property investment according to new research from Handelsbanken’s Property Investor Report 2025.
By James Sproule, UK Chief Economist at Handelsbanken
London has re-emerged as the UK’s most attractive region for property investment according to new research from Handelsbanken’s Property Investor Report 2025. After slipping to fifth place in 2024, the capital has surged back to the top spot, cited by 46% of respondents as the most appealing region for property investment over the next 12 months.
In a market shaped by shifting economic conditions, affordability pressures, and evolving investor priorities, London’s resurgence signals a renewed appetite for stability, scale, and long-term returns. The report, based on a survey of 200 professional landlords and property investors across the UK, reveals a sector recalibrating its focus.
Chris Teasdale, Chief Branch Officer at Handelsbanken, commented:
“London’s comeback is a clear sign that investors are prioritising resilience and long-term value. While regional markets have delivered strong returns in recent years, the capital’s infrastructure, rental demand, and global appeal continue to set it apart. This year’s data shows that confidence in London is not just returning, it’s accelerating.”
The East of England follows closely behind at 42%, maintaining strong momentum after topping the rankings in 2024. With cities like Cambridge offering a blend of innovation, quality of life, and economic diversity, the region remains a magnet for investors seeking balanced growth.
Meanwhile, the South East has also seen a notable rise in investor sentiment, climbing to 34% from 21.5% last year. However, not all regions are faring equally—Yorkshire & the Humber dropped sharply to just 4.5%, down from 12.5% in 2024, highlighting widening regional disparities.
Key Findings from the 2025 Report:
- London is the top investment region, cited by 46% of respondents (up from 21% in 2024)
- East of England holds strong at 42%, after leading in 2024
- South East rises to 34%, reflecting renewed investor interest
- Yorkshire & the Humber falls to 4.5%, underscoring regional divergence
- 54% of investors plan to expand their portfolios in the next 12 months
London’s rebound is more than a headline, it’s a signal. Investors are recalibrating in response to affordability challenges, tenant demand, and macroeconomic uncertainty. The capital’s fundamentals remain strong, and for many, it represents a safe harbour in a shifting market.
While regions like Wales and the North East have seen rapid property value growth in recent years, the report suggests that investors are now balancing short-term gains with long-term security. London’s return to the top reflects a broader trend: a renewed focus on core markets with proven resilience.
The Handelsbanken Property Investor Report 2025 paints a picture of a sector in transition. As landlords navigate regulatory changes, inflationary pressures, and evolving tenant expectations, those who adapt, by diversifying portfolios and aligning with market signals, are best positioned to thrive.
