Introduction
The UK rental market is evolving fast. As cities adapt to post-pandemic lifestyles, hybrid working, affordability pressures, and regeneration, renter preferences are shifting. The big question for investors in 2025: are tenants flocking to city centres, or are the suburbs gaining ground?
Understanding where renters want to live and why is crucial for building a high-performing portfolio. Both city-centre and suburban locations offer distinct advantages in terms of yield, tenant profile, and capital growth. But knowing how demand is trending this year can help investors make smarter choices.
Key Takeaways
- Renter demand is increasing in both city-centre and suburban locations, but for different reasons: lifestyle, affordability, and regeneration are key drivers
- City centres like Manchester, Birmingham, and Leeds are seeing strong demand from graduates, professionals, and international tenants
- Suburbs offer better value, more space, and appeal to families and hybrid workers, with some zones seeing rental price growth of 8% or more
- Investors should assess property type, tenant profile, and infrastructure links when deciding between urban and suburban strategies
Renter Behaviour in 2025: What’s Changed?
According to the latest Zoopla Rental Market Report, UK rents increased by 6.6% year-on-year to May 2025. However, the growth wasn’t evenly distributed. Suburban markets have outperformed in many cities, driven by tenants seeking better value and space. At the same time, inner city areas like Manchester’s Ancoats or Birmingham’s Jewellery Quarter continue to attract professionals looking for lifestyle perks.
In short, renter priorities have diversified. Investors who understand these trends can target high-performing locations based on tenant type, not just postcode prestige.
City Centre: Still a Magnet for Professionals and Students
Despite rising costs, many renters still prioritise central locations. Proximity to work, universities and transport links remains non-negotiable for students and young professionals.
For example:
- Manchester city centre rents grew 9.8% in the past 12 months (JLL 2025 Residential Forecast)
- Birmingham’s Digbeth and Southside neighbourhoods have seen a 10% increase in student rental demand (Centrick, 2025)
- Central London rents stabilised in Q2 after a record 13% rise in 2024, according to Savills, due to a softening in demand at the top end
These figures highlight that while affordability pressures exist, demand for walkable, high-amenity city centre living remains resilient in the UK’s top metros. Properties here offer strong yields, shorter voids and reliable tenants.
Suburbs: The New Hotspot for Hybrid Workers and Families
The suburbs are no longer just a retreat for families. Young professionals and hybrid workers now seek neighbourhoods that offer a balance between space, connectivity and community. Suburban areas with easy access to the city are seeing stronger than expected rental growth.
Key insights:
- Suburban rents rose 7.4% year-on-year versus 4.9% in city centres (Zoopla Q2 2025)
- In London, outer zones like Walthamstow and Bromley outperformed inner boroughs in both rent growth and yield (HomeLet, July 2025)
- In Manchester, areas like Stretford, Chorlton and Prestwich have become renter favourites due to tram links and affordability
This shift has opened up new opportunities for landlords. Two and three-bed homes near parks and transport links are commanding higher rents and faster lets than before.
What Tenants Value Now: Insights for Investors
Today’s tenants aren’t just looking for location. Data from Rightmove’s 2025 Renter Priorities Survey reveals the top five renter priorities:
- Proximity to transport (82%)
- Access to green space (76%)
- Energy efficiency (68%)
- High-speed internet (67%)
- Community feel (55%)
City-centre flats with amenities tick many of these boxes, but so do newly regenerated suburban schemes. Investors should target developments that blend convenience with quality of life. High EPC-rated homes, especially in suburban regeneration zones, are letting quickly.
Where Are Yields Strongest?
For buy-to-let investors, yield is still king. According to PropertyData and JLL:
- Manchester’s suburbs such as Levenshulme and Stretford offer gross yields between 5.8% and 6.3%
- Birmingham’s Perry Barr and Selly Oak produce similar returns, with high student and professional demand
- London suburbs like Barking and Dagenham average 5.2%, outperforming inner zones such as Camden or Islington
While city-centre properties command higher rents, they come with higher prices. Suburban homes offer lower entry points, wider tenant pools and comparable or even better yields in some cases.
How Rothmore Property Can Help
At Rothmore Property, we help investors identify where the market is heading, not where it has been. Our curated selection of new-build and regeneration projects spans the UK’s top-performing city-centre and suburban locations. Whether your focus is yield, capital growth or long-term rental stability, our team sources off-market opportunities to match your strategy.
With over 60 developments across cities like Manchester, Birmingham and London, we guide UK and international investors through the full process: from property selection and negotiation to completion and management.
Explore our latest opportunities here: Rothmore Property
Closing Thoughts: Both Markets Hold Opportunity in 2025
City centre or suburbs? In 2025, both offer potential if you know where to look. With strong rental demand, regeneration, and flexible working patterns reshaping renter behaviour, smart investors are looking beyond simple urban or suburban divides.
Instead, focus on tenant trends, infrastructure links, and regeneration plans to spot where value is rising. The best investments are those aligned with lifestyle shifts, long-term planning, and location-led growth.
