After falling to fifth place in 2024, the capital has surged back to the top, cited by 46% of surveyed professional landlords and property investors as the most attractive destination for the coming year.
The survey of 200 property professionals highlights a sector adapting to changing economic conditions, with more than half (54%) of investors planning to grow their portfolios in the next 12 months. London’s return to prominence is seen as a central driver behind this renewed expansion.
Chris Teasdale, chief branch officer at Handelsbanken, believes London’s resurgence reflects a shift in investor priorities.
“London’s comeback is a clear sign that investors are prioritising resilience and long-term value,” he said. “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 continues to attract strong investor interest, cited by 42% of respondents and maintaining momentum after topping last year’s rankings. The South East has also seen a notable increase in sentiment, with 34% of investors selecting it as their preferred region, up from 21.5% in 2024.
However, not all regions are benefiting equally – Yorkshire & the Humber saw a sharp drop in interest, falling to just 4.5% from 12.5% last year, highlighting growing regional disparities.
James Sproule, UK chief economist at Handelsbanken, believes London’s rebound signals a wider recalibration in the market.
“Investors are recalibrating in response to affordability challenges, tenant demand, and macroeconomic uncertainty,” he said. “The capital’s fundamentals remain strong, and for many, it represents a safe harbour in a shifting market.”
