Buy-To-Let Property Investment Leicester: High Yields in the East Midlands Core

As one of the three core East Midlands cities, Leicester offers a compelling mix of affordability and strong, consistent returns. Driven by two major universities and significant inner-city renewal, investing in property in Leicester capitalises on massive tenant demand. A strategic Leicester buy-to-let property plan should target areas with proven student and professional appeal.

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Key Performance Indicators

Why Leicester is a Top UK Investment City

£232,000

average house price Leicester

5.20%

average AST Leicester rental yields

+22%

Capital growth by 2028 forecast

+7.4%

Annual Leicester rental growth (To Sept 2025)

43,000+

Student population

2nd

Second largest economy in the East Midlands

Market Summary

Leicester Property Market Trends and Resilience

The Leicester market has shown remarkable long-term resilience, with prices soaring over $40\%$ in the last decade due to population growth outpacing housing delivery. The city remains an accessible market, with average prices below the UK national average, positioning it for further growth. As part of the core East Midlands growth area, Savills forecasts the region could see up to $+22.2\%$ price growth between 2025 and 2029. This combination of affordability and strong growth makes it an investor hotspot.

Yields

Leicester Buy-to-Let Rental Yields and Income

Leicester is a consistent high-yield performer. Average gross yields range from $5.0\%$ to $7.5\%$ in central and inner-city postcodes. Rental demand is exceptionally strong due to a large-scale gulf between supply and demand, driven by rapid population growth and the huge student base. Rental prices rose by $7.4\%$ annually to September 2025, significantly above the regional average, ensuring reliable and increasing cash flow for investors.

Regeneration

Major Regeneration Projects Powering Leicester Property Value

Strategic regeneration is creating a new, attractive profile for Leicester, driving both residential and commercial demand:

Waterside Regeneration: A $\text{\pounds}20$ million investment transforming a $150$ -acre former industrial area in the north-west (LE1/LE3) into a vibrant new neighbourhood. This catalyst project will deliver $\mathbf{350}$ new homes, offices, and commercial workspaces, significantly boosting property values in the area.
Leicester Station Gateway: A $\text{\pounds}22$ million Levelling Up scheme to remodel the railway station entrance, creating a more attractive gateway to the city centre and supporting the appeal of the central LE1 postcode.
Pioneer Park: A key investment area focused on high-tech industries, including the development of new Dock-style buildings and manufacturing spaces near Abbey Lane, attracting professional tenants in the digital and life sciences sectors.

Connectivity

Leicester Transport Links and Connectivity for Commuters

Leicester's central position in the UK's "Golden Triangle" is a huge advantage, making it highly attractive for commuter tenants and logistics employers.

National Rail: Leicester Railway Station provides fast, frequent services to key destinations, including London St Pancras (approx. 60-75 mins), Birmingham, and Nottingham, making it a viable commuter hub.
Road Network: The city benefits from unrivalled road access, sitting near the M1, M6, and M69 motorways. This is vital for tenants working across the East and West Midlands and supports the massive regional logistics industry.
Proximity to Airports: East Midlands Airport is a major transport hub nearby, providing essential domestic and international links for the professional community.

Areas Overview

Best Areas to Invest in Leicester Property for Strong Returns

Strategic investment should target the areas with the highest yield derived from student/young professional demand.

Leicester City Centre (LE1)

Highest Yield & Professional Rent

High rental yields ( $\mathbf{7.5\%}$ ) on flats and conversions. Appeals to young professionals and final-year students due to proximity to the city's amenities and employment.

Clarendon Park (LE2)

Student & Young Professional

Highly desirable, leafy suburb close to the University of Leicester. Offers strong, reliable returns and very low void periods, ideal for HMOs and single-lets.

West End / Narborough Road (LE3)

Value & Diversity

Vibrant, multicultural area popular with students, sharers, and young families. Affords more accessible prices and good yields ( $\mathbf{5.3\%}$ ) near De Montfort University.

Highfields (LE2/LE5)

Affordability & Yield

Traditionally offers more affordable entry prices and above-average rental returns. Ideal for investors seeking cash flow and future capital appreciation as the centre expands.

Loughborough (LE11)

Dedicated Student Town

Home to Loughborough University (famous for sports/engineering). Excellent dedicated student market with some of the highest yields in the region (8.9%+ on HMOs).