The property market is heading South: These six key hotspots make this great news for investors

The UK property market is currently hanging in a delicate balance. On the one hand, Capital Gains Tax rises have diminished profit margins, whilst increasing liabilities for those looking to sell. On the other hand, however, we’ve now seen lower rates of inflation (at 2.6%) for two months in a row, as the Bank of England simultaneously reduced its benchmark interest rate to 4.5% in February – with further reductions anticipated for later this year.

Together, these changes could see a rise in affordability, as well as a spike in interest from young people looking to get on the property ladder – potentially widening revenue streams for investors. Of course, economists have still warned that inflation could go back up to 3% or above, with volatility remaining a significant issue that mustn’t be ignored.

Regardless of the above risks, property remains a great way to hedge against uncertainty, particularly at a time when, according to Rightmove, property prices are set to increase by 3% by the end of the year. Now is the time to strike. Whilst significant ROI can never be guaranteed, there are certain moves investors can make to increase the profitability of their portfolios, as they protect themselves from potential market falls.

Location as a compass

With a cost-of-living crisis that’s made affordability challenges acute for both property investors and the people who rent or buy their houses, 2025 is not the year to cast a wide net. Rather, it’s time to invest with precision, choosing locations that don’t just offer high yield potential in isolation, but align with evolving buyer and tenant behaviours, as well.

Since the pandemic, green spaces, quality schools, community-based amenities, and other lifestyle factors have taken precedence over buyer decisions. Indeed, multiple Zoopla studies have shown that young people – first-time buyers and families alike – see quality of life as the most important decision-making factor when purchasing property, with home movers likewise willing to pay more for access to parks, strong transport links and thriving high streets, according to the Halifax. This translates into a booming opportunity for landlords and investors willing to think beyond the bounds of mere bricks and mortar – considering the merits of the area surrounding their properties, too.  

Greater London and its surroundings

The Greater London area – and the towns and cities that sit immediately around it – will always be a safe bet for savvy investors. With strong economies, infrastructure, and plans for future development, these areas will always attract discerning tenants and buyers.

Croydon

Situated to the South of London, whilst remaining part of the greater city, Croydon has long outgrown its gloomy reputation. In fact, now home to a rising number of startups and modern co-working spaces, many have dubbed the dynamic urban centre the new “tech hub of South London” – something that’s bound to attract many viable buyers and tenants to the area. If this wasn’t enough, prospective clients will also benefit from a vibrant culture scene, with Boxpark Croydon ensuring there is plenty of food and drink on offer, alongside the more historic parts of the city, such as the arts complex located at Croydon Clocktower.

The key is to invest in up-and-coming areas like this, as they are capable of promising growth and continued interest even in cases of economic downturn. In fact, with the London Borough of Croydon recently allocating £30.8 million towards transforming the delivery of local infrastructure and welfare services, prospective investors can rest assured that the town is far from risk of decline.

Hemel Hempstead

Hemel Hempstead, located in Hertfordshire, northwest of London, remains a stable choice. Situated within the commuter belt, the Hertfordshire Local Enterprise Partnership has invested £6 million into redesigning Junction 8 of the M1, in conjunction with the Crown Estate. This, combined with the fact that Hemel Hempstead is just a 30-minute train ride from Euston, will ensure that the post-war new town will continue to attract commuters drawn in by the strong sense of community and abundance of green spaces. Families are likewise drawn to the town owing to its many great schools and surrounding Chiltern Hills countryside – all factors that ensure sustainability on property investment.

Guildford

Guildford in Surrey makes a great choice for discerning investors, owing to the picturesque nature of the historic town, which also boasts a great academic reputation. With excellent schools, traditional charm and an affluent housing market, Guildford has long been an attractive spot for homeowners and families, surviving many market blips – making it a safe choice in even the most unstable of circumstances, particularly given that it's also within 40 minutes of London.

South-East England

Located within commuting distance of the capital, making it ideal for hybrid workers. South-East England also offers many prosperous property investment opportunities catering to the needs of both town and city people.

Windsor

Known for its castle and connection to royalty, this Berkshire town offers all the advantages of a place close enough to commute to London, whilst also giving residents a slice of historic architecture, greenery and prestige. The famous Long Walk and Windsor Great Park are among its most treasured landmarks, with a beautiful riverside and high-end amenities also making it an ideal place to invest for those looking to attract a more affluent market.

Once again, investors needn’t worry about decline, as tourism maintains an ongoing economy to support quality of life here, with the Windsor Planning Commission also recommending approval of the Capital Improvement Plan for 2026-2030. Combined with the £9.4 million that the Royal Borough has just invested in adult social care – alongside a £9.8 million investment in children’s services – this will likely see property prices rise over time, generating significant returns for those willing to act now, before investor affordability declines.

Farnham

Continuing along the historical route, Farnham is a quintessential English market town in Surrey, boasting beautiful Georgian architecture and a more artistic vibe. With Farnham Castle, Waverly Abbey ruins and Farnham Maltings (a creative arts centre) among its gems, nestled in the Surrey Hills Area of Outstanding Natural Beauty, this town will also always have a thriving economy. A popular choice for both families and downsizers, the town is great for investors looking to attract a more affluent market – also promising ROI growth with plans such as the “Invest in Farnham” initiative boosting business growth, economic development and community engagement in the area.

Hastings

Hastings in East Sussex is a coastal gem with a rich maritime and artistic heritage. It’s becoming an increasingly popular destination for Londoners seeking seaside life, whilst still being close enough to commute into the capital city. Hastings Castle, the Old Town and vibrant Jerwood Gallery (now Hastings Contemporary) all add to its appeal – allowing savvy investors to build a growing creative community there, as they access relatively affordable coastal housing.

Raising portfolios by heading South

By investing strategically in stable, up-and-coming or already thriving London-adjacent locations, shrewd investors can ensure their portfolios are only heading south strategically, rather than financially – protecting themselves from any upcoming fluctuations in the market. The key is to identify pockets of promise that offer long-term value via lifestyle appeal, rather than reaching for quick wins that may fail over time. Commuter-friendly towns like Hemel Hempstead and Guildford, or coastal gems like Hastings, provide just the ticket.