The South East has ranked as the third most attractive region for property investment, according to new research from Handelsbanken Property’s Investor Report 2025.
Just behind London and the East of England, the South East was named by 34% of respondents the third largest target region for property investment over the next 12 months. This reflects the growing attractiveness of the region’s skilled labour force and business opportunities.
Neil Higgs, district head for the South East at Handelsbanken, said: “The South East has seen a huge increase in investor sentiment, not least as it represents a blend of living quality, transport links and a thriving overall economy. We fully expect the market to continue to go from strength to strength.”
In contrast, London has re-emerged as the UK’s most attractive region for property investment.
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.
Chris Teasdale, chief branch officer at Handelsbanken, explained: “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:
- South East rises to 34%, reflecting renewed investor interest
- East of England ranks 2nd with 42% investor interest after leading in 2024
- London is the top investment region, cited by 46% of respondents (up from 21% in 2024)
- Yorkshire & the Humber falls to 4.5%, underscoring regional divergence
- Over half (54%) of investors plan to expand their portfolios in the next 12 months
James Sproule, UK chief economist at Handelsbanken, added: “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.
