Navigating the 2025 Rental Market: Off-Plan Buy-to-Let – Your Investment Guide

Navigating the 2025 Rental Market: Off-Plan Buy-to-Let in Liverpool, Leicester & Cleveleys – Your Investment Guide

Introduction

As we move further into Q1 2025, the UK rental market continues to be dynamic, presenting both challenges and significant opportunities for savvy investors. Record high rents across the nation signal strong tenant demand, yet affordability ceilings and evolving market conditions require a strategic approach to property investment.

This long-form piece provides a comprehensive overview of the rental market in Q1 2025, and pinpoints why off-plan, buy-to-let investments in Liverpool, Leicester, and Cleveleys are particularly well-positioned for robust returns. With expert guidance from Portico Invest, you can navigate this landscape with confidence and mitigate risks to unlock the full potential of your property portfolio.

Q1 2025 UK Rental Market: Key Trends

The UK rental market in early 2025 is characterised by several key trends, painting a picture of both opportunity and the need for informed investment decisions:

• Record Rental Prices: The latest data confirms that UK rental prices have reached unprecedented levels. 
• Demand Outstrips Supply: A persistent imbalance between tenant demand and available rental properties continues to drive rental growth. While property listings have increased slightly compared to last year, they remain significantly below pre-pandemic levels. Competition for rental properties is fierce, particularly in high-demand areas
• Slowing Growth, Affordability Limits: While rental prices are still increasing, the rate of growth is beginning to moderate. Experts suggest that affordability ceilings are being reached, leading to a more sustainable, albeit slower, pace of rental inflation
• Regional Performance Variations: The rental market is not uniform across the UK. London and other major cities are experiencing slower rental growth compared to more affordable areas, especially in the North and regions like the North East and North West, where rents are rising rapidly as tenants seek better value
• Economic Outlook: The broader economic outlook for 2025 suggests a degree of stabilisation. Inflation is projected to fall, and the Bank of England is expected to reduce interest rates, potentially leading to more stable mortgage rates and renewed investor confidence in the property market.

Why Liverpool, Leicester & Cleveleys for Buy-to-Let Investment?

In this evolving market, strategic location selection is paramount. Liverpool, Leicester, and Cleveleys stand out as prime locations for buy-to-let investments, particularly within the off-plan sector.

Liverpool: High Yields and Regeneration

Liverpool presents a compelling case for buy-to-let investors, driven by:

• Exceptional Rental Yields: Liverpool consistently offers some of the highest rental yields in the UK, often exceeding 7% and reaching over 9% in prime areas. This significantly surpasses the UK average gross yield, making Liverpool a high-return investment hub.
• Affordable Property Prices: Compared to other major UK cities, Liverpool maintains a significantly lower average property price making market entry more accessible and portfolio expansion achievable.
• Significant Regeneration & Growth: Liverpool is undergoing substantial regeneration, with over £14 billion of projects underway, including the £5.5 billion Liverpool Waters development. This investment is attracting new businesses, residents, and driving property value appreciation.
• Strong Rental Demand: Liverpool benefits from a diverse tenant pool, including families, young professionals drawn to the growing business district, a large student population, and tourists attracted to the city’s cultural offerings.
• House Price Growth Forecast: Liverpool’s property market is experiencing an upturn, with average house prices showing consistent growth. Forecasts for 2025 and 2026 predict continued price appreciation, making it an opportune time to invest for capital gains.

Leicester: Steady Growth and Affordability

Leicester offers a different, yet equally attractive investment proposition:

• Consistent House Price Growth: Leicestershire has seen steady house price growth, outpacing the average for England and Wales. Average prices have risen by 3.1% year-on-year, with further growth anticipated.
• Strong Regional Growth Forecast: The East Midlands region, where Leicester is located, is projected to experience substantial house price growth of 18.5% between 2025 and 2028.
• Economic Stability: Leicester benefits from a stable local economy and is predicted to see economic growth in 2025 and 2026, supporting a healthy property market.
• Affordable Living and Connectivity: Leicester offers relatively affordable living costs compared to other major UK cities, coupled with excellent commuter connections and a central location, making it attractive to renters

Cleveleys: Emerging Hotspot in the North West

Cleveleys presents an exciting opportunity as an emerging property hotspot:

• North West Growth Leader: The North West region is predicted to lead the UK in house price growth over the next five years, with a projected increase of nearly 30%.
• Lancashire’s Potential: Cleveleys, located in Lancashire, is poised to benefit from this regional surge. While specific data for Cleveleys is less readily available, the broader Lancashire area is identified as a key driver of growth within the North West.
• Catching Up to Demand: As affordability becomes a greater concern in traditional property hotspots, areas like Lancashire and Cleveleys are attracting increased attention from both homeowners and investors seeking value and growth potential.

Rental Increase Projections: 2025 & 2026

While rental growth is expected to moderate from the peaks seen in recent years, projections for the next two years remain positive:

• 2025: Experts predict a UK-wide rental increase of around 3-4% for new lets. Areas outside of London and major expensive cities may see higher growth as affordability becomes a key driver for tenant choices
• 2026: Continued rental growth is expected into 2026, although forecasts vary. Factors such as economic performance, interest rate movements, and housing supply will influence the precise rate of increase.

Property Price Predictions: Next 2 & 10 Years

• Liverpool: Anticipated house price growth of around 3% in 2025, increasing to 5.5% in 2026. Long-term projections remain positive, driven by ongoing regeneration and strong demand. 
• Leicester: House prices in the East Midlands are predicted to rise by 18.5% between 2025 and 2028, indicating strong medium-term growth potential for Leicester. 10-year forecasts based on continued regional growth and economic factors, suggesting a potentially significant increase.
• Cleveleys/North West: The North West is forecast to see the highest house price growth in the UK over the next 5 years (to Jan 2030), with a 29.4% increase predicted. Projecting to 10 years suggests substantial long-term capital appreciation in this region.

Off-Plan Buy-to-Let: Investing in the Future

What is Off-Plan Buy-to-Let?

Off-plan buy-to-let investment involves purchasing a property before it is built, typically directly from a developer. Investors commit to buying based on plans, architectural drawings, and projected completion dates.

Benefits of Off-Plan Investment:

• Below Market Value Prices: Developers often offer discounted prices on off-plan properties to secure early investment and funding for the project
• Capital Growth During Construction: Property values typically increase over time, and off-plan investments allow you to benefit from potential capital appreciation during the construction phase, meaning you could gain equity even before completion
• Wider Choice & Prime Locations: Off-plan investing provides access to new developments and often allows you to secure units in prime locations that may not be available on the resale market later. You also gain a wider selection of units to choose from early in the development process.
• Customisation Options: Depending on the developer and stage of construction, you may have opportunities to customise aspects of the property’s design and finishes, potentially increasing tenant appeal and rental income.
• Brand New, Tenant-Ready Properties: Off-plan properties are brand new, built to modern standards, and come with warranties, minimising initial maintenance and repair costs and appealing to tenants seeking modern living spaces

Mitigating Risks with Portico Invest

Investing in off-plan property, like any investment, carries potential risks. These can include construction delays and market fluctuations. However, with Portico Invest, you are not alone.

Portico Invest provides expert guidance throughout every step of your off-plan buy-to-let investment journey. We help you:

• Identify High-Potential Developments: Our experienced team carefully vets off-plan developments in prime locations like Liverpool, Leicester, and Cleveleys, focusing on reputable developers and projects with strong growth prospects.
• Navigate the Purchase Process: We guide you through the complexities of off-plan purchases, from reservation to completion, ensuring a smooth and transparent transaction.
• Secure the Best Deals: Leveraging our market knowledge and developer relationships, we help you negotiate favourable purchase terms and potentially access exclusive investor discounts.
• Mitigate Risks: We conduct thorough due diligence on developers and projects to minimise risks associated with delays or build quality, and advise on strategies to protect your investment.
• Maximise Your Returns: Portico Invest provides ongoing support to help you manage your buy-to-let property effectively, ensuring optimal rental yields and long-term capital appreciation.

Conclusion

The UK rental market in Q1 2025 presents a landscape ripe with opportunity for strategic investors. By focusing on high-yield locations like Liverpool, growth areas like Leicester, and emerging hotspots such as Cleveleys, and by leveraging the advantages of off-plan buy-to-let investments, you can build a resilient and profitable property portfolio.

Portico Invest is your dedicated partner in navigating this market. Contact us today to explore off-plan buy-to-let opportunities in Liverpool, Leicester, and Cleveleys and take the first step towards securing your financial future.

Disclaimer: Property investment involves risks. Property values and rental yields can fluctuate. Forecasts are not guarantees and are based on current market analysis and expert predictions at the time of writing. This content is for informational purposes only and does not constitute financial advice. Always seek independent financial and legal advice before making any investment decisions.