Are Northern Cities Still Leading the Market?

The narrative of the “Northern Powerhouse” has been circling for nearly a decade now. It promised revitalisation, investment, and a rebalancing of economic gravity away from London. And for a time, northern cities like Manchester, Leeds and Liverpool began to prove the idea had legs. Developers flocked to build, investors sought high yields, and once-overlooked postcodes became watchwords for regeneration.

But the market is a different beast in 2025 than it was even five years ago. With national property prices wobbling, interest rates refusing to behave, and London staging a tentative comeback, it’s fair to ask: are northern cities still out in front?

What Defined the Northern Surge?

Back when HS2 was still the great northern hope (before most of it got axed), the logic was straightforward: infrastructure plus affordability equals opportunity. You could buy two or three properties in Manchester or Leeds for the price of one in zone 2 London, and the rental returns looked enviable.

Combine that with surging student populations, thriving tech and media sectors, and major employers relocating regional HQs, and the North wasn’t just competing—it was pulling ahead.

Cities like Sheffield and Liverpool rode the wave, though Manchester arguably became the poster child. With its young demographic, extensive transport network and internationally recognised universities, it became a magnet for both domestic and overseas investment.

Is Manchester Still at the Top?

While other regions have started to catch up—or at least slow their descent—Manchester remains remarkably resilient. According to the latest UK rental growth statistics, it’s among the few cities still seeing year-on-year increases, especially in central districts.

That’s no accident. The active housing market in Manchester continues to show signs of dynamism, driven by consistent demand, limited supply, and a rental base that keeps growing. Student lets, young professionals, short-term corporate rentals—they all stack up to sustain strong yields.

Developments haven’t slowed much either. There’s been a noticeable shift toward mixed-use builds and green space integration (smart, given post-pandemic preferences), but cranes still pepper the skyline. It’s not quite boom times—but it isn’t bust either.

What About the Other Contenders?

Leeds often comes up next in line. And there’s a strong case for it: it’s got one of the fastest-growing economies in the country, a major finance hub, and large-scale regeneration projects (like the South Bank scheme) that will change the face of the city.

Liverpool, meanwhile, remains a bit of an enigma. Its affordability and student population are undeniable assets, but rental yields vary widely by postcode. Some investors have done very well here; others, less so. The city can be slightly more sensitive to national fluctuations, and planning delays haven’t helped.

Sheffield and Newcastle are also quietly making gains—especially with younger buyers priced out of more prominent cities. But they haven’t quite achieved the same weight in the investment consciousness. At least, not yet.

Are Southern Cities Catching Up?

It’s tempting to assume the North-South divide is closing, but it depends on the metric. In terms of average property values, London still commands the top of the chart. But price growth, rental yield, and capital appreciation? Northern cities often edge out their southern counterparts—particularly if you’re thinking long-term.

That said, cities like Bristol and Birmingham (yes, technically the Midlands) have been putting on solid performances. Bristol, in particular, has a knowledge economy that punches above its weight, and its housing market remains tight and competitive. For lifestyle buyers and young professionals, it’s a serious contender.

What Could Tip the Balance?

One wild card in the whole discussion is transport. With parts of HS2 scrapped and regional rail upgrades lagging, the infrastructure advantage northern cities were promised hasn’t fully materialised. The ambition was there—connectivity, job growth, commuter belts—but some of the reality has lagged.

Meanwhile, if interest rates begin to ease in the next 12 months, we might see renewed confidence in southern commuter towns, where mortgage affordability has taken a bigger hit. That could eat into the North’s appeal for value-focused investors.

Then again, regional employment hubs continue to decentralise. Remote work isn’t dead, but hybrid is now the norm. People don’t want to be tied to London rents if they only go into the office twice a week. That behavioral shift continues to tilt the scales toward the regions.

So—Are Northern Cities Still Leading?

In many ways, yes. They offer a rare balance of affordability and growth potential, particularly for investors willing to look past short-term wobbles. The regeneration story hasn’t stalled, and demand—for rentals in particular—remains high.

But it’s no longer a one-horse race. Other cities are gaining ground, and savvy investors are more likely to pick based on specific street-level data than national headlines. The days of just “buy anywhere in Manchester and you’ll win” might be over.

Still, the fundamentals remain. Young renters, limited housing stock, strong university draws, and a habit of weathering economic uncertainty better than most. That’s not a bad combination—and it’s why northern cities continue to earn their spot on investor shortlists.

The lead may not be as dramatic as it once was. But it’s still a lead.