Regional Development Hotspots in the UK: Where to Invest in 2026

For much of the past two decades, London dominated the UK development landscape. The capital offered the highest values, the deepest sales demand, and the greatest concentration of lender appetite. While London remains an important market, the development opportunity set has shifted meaningfully toward the regions since 2023. Several structural factors are driving this change, and in our experience, developers who recognise and act on these trends are achieving some of the strongest returns in recent memory.

The first factor is affordability. London house prices remain stretched relative to average earnings, limiting the pool of purchasers for new-build homes. In contrast, many regional cities offer price-to-earnings ratios that support strong first-time buyer and home mover demand. A three-bedroom new-build house in Greater Manchester priced at £300,000 attracts a fundamentally different — and often considerably deeper — buyer pool than an equivalent property in outer London at £550,000. For developers, this translates directly into faster sales rates and greater appraisal certainty.

The second factor is achievable development margin. Land values in London have remained stubbornly high, compressing developer margins considerably. In many regional markets, land can be acquired at prices that support 20-25% profit on GDV with comfortable build costs. We have seen several schemes in the Midlands and North of England delivering 25%+ returns on capital — figures that are increasingly difficult to achieve in London without mezzanine finance or joint venture structures. For an overview of how development finance supports regional schemes, the fundamentals are the same, but the numbers often work more favourably outside the capital.

Greater Manchester is arguably the standout regional development market in the UK. The city has benefited from sustained public and private investment — including the continued build-out of NOMA, the St John's Quarter, and the wider Northern Gateway regeneration area. Population growth, a diversified employment base anchored by financial services, technology, and the creative industries, and improving transport connectivity have created strong demand for both residential and commercial space.

New-build sales values in prime Manchester locations (Deansgate, Ancoats, Salford Quays) have reached £400-£500 per square foot for apartments, with suburban house values of £250,000-£400,000 achieving rapid sales. Build costs are typically 15-20% below London equivalents, which supports attractive development margins. A 20-unit apartment scheme in Salford with a GDV of £4,500,000 and total costs of £3,200,000 would deliver a profit of £1,300,000 — a healthy 29% return on GDV and one that lenders are very comfortable underwriting.

Lender appetite for Manchester schemes is strong. In our experience, the city now attracts almost as deep a pool of development finance lenders as London, with rates starting from 7% for experienced developers. The wider North West — including Liverpool, Chester, and the Lancashire towns — also offers opportunities, particularly for residential conversion and regeneration schemes. Merseyside in particular has seen a wave of PRS-led development activity, supported by institutional investors seeking higher yields than London or the South East can offer.

Birmingham and the wider West Midlands continue to benefit from the HS2 effect, even as the project's scope has evolved. The Curzon Street station development is catalysing regeneration across Digbeth and Eastside, creating opportunities for residential, mixed-use, and commercial schemes. Birmingham city centre has seen new-build apartment values rise to £350-£450 per square foot, with strong demand from young professionals and investors.

Beyond Birmingham, the Midlands offers a range of development opportunities. Coventry, Warwick, and Solihull benefit from proximity to major employers including Jaguar Land Rover and the University of Warwick. Nottingham and Leicester have seen growing demand for student and build-to-rent accommodation, driven by expanding university populations and a limited supply of quality housing. We have arranged development finance for schemes across Nottinghamshire and Leicestershire with increasing frequency, and lenders are responding positively to the demand fundamentals.

The Midlands also offers some of the most attractive land prices in England. Development sites in secondary Midlands locations can be acquired for £500,000-£1,000,000 per acre — a fraction of equivalent sites in the South East. For developers with the expertise to identify and de-risk these opportunities, the margins are compelling. A scheme of 10 houses in Staffordshire with a GDV of £3,000,000 and land costs of £400,000 would typically generate a profit margin of 22-25% after finance costs, comfortably above lender thresholds.

West Yorkshire — centred on Leeds and Bradford — is emerging as a significant development market. Leeds has established itself as a major financial and legal centre, with a growing technology sector that is driving demand for quality residential accommodation. The South Bank regeneration area, anchored by the Channel 4 headquarters, represents one of the largest urban regeneration opportunities in the UK. New-build values in central Leeds range from £300-£400 per square foot for apartments, with scope for growth as infrastructure investment continues.

Sheffield and South Yorkshire offer a different but equally interesting proposition. The city's Advanced Manufacturing Innovation District (AMID) is attracting investment and creating employment, while the university population supports demand for both purpose-built student accommodation and private rental homes. We have arranged development finance for several schemes in South Yorkshire recently and found lenders increasingly willing to engage with the market. Rates for well-located schemes with proven demand are now comparable to those achievable in more established regional markets.

The North East — particularly Newcastle and Gateshead — represents value for developers prepared to look beyond the obvious. Land prices are among the lowest in England, with development sites available from £250,000 per acre in accessible locations. Build costs are competitive, and new-build demand from owner-occupiers is solid in well-located schemes. The Tyne and Wear region benefits from a loyal local buyer base and improving economic fundamentals, with major regeneration projects along the Quayside and in the city centre creating momentum. Average new-build house prices of £220,000-£350,000 deliver healthy margins against build costs that are among the most reasonable in the country. For developers considering opportunities in these areas, our guide on how development finance works covers the fundamentals that apply regardless of location.

Scotland deserves special attention as a development market. Edinburgh consistently ranks among the strongest-performing property markets in the UK, with constrained supply (due to its UNESCO World Heritage status and topographical limitations), strong demand from domestic and international buyers, and a resilient economy anchored by financial services, technology, and tourism. New-build values in central Edinburgh locations can exceed £500 per square foot, placing it firmly alongside London and Manchester in pricing terms.

Glasgow offers a contrasting but compelling opportunity. The city has undergone substantial regeneration over the past decade, with new-build development concentrating in areas like the Merchant City, Finnieston, and the Clyde waterfront. Values are lower than Edinburgh — typically £250-£350 per square foot for apartments — but build costs are also lower, and the development margins can be attractive. The Scottish Government's housing policies, including Help to Buy equivalents and affordable housing requirements, create a framework that developers need to understand and work within.

Financing development in Scotland requires an understanding of Scots law, which differs from English law in several material respects — including the use of standard securities rather than legal charges, and differences in the planning system. Not all development finance lenders are active in Scotland, but those that are understand these nuances. We have established relationships with lenders who are comfortable with Scottish security and can offer terms comparable to English equivalents. If you are considering a development in Edinburgh, Glasgow, or elsewhere in Scotland, our deal room can connect you with appropriate lenders.

Bristol and the wider South West continue to attract development interest. Bristol has seen sustained population growth, driven by its technology sector, two major universities, and quality of life. New-build values in desirable Bristol postcodes (Clifton, Harbourside, Redcliffe) rival outer London levels, while build costs remain below the capital. Devon, Somerset, and Dorset offer opportunities for lifestyle-led developments — family housing in market towns and coastal locations — where demand from relocating buyers (many with London equity) supports premium pricing.

The East of England, particularly Cambridgeshire and the wider Cambridge corridor, benefits from world-class employment drivers. The Cambridge biotech and technology cluster creates demand for quality housing that consistently outstrips supply. New-build values in Cambridge itself are among the highest outside London, and even satellite locations like Ely, Newmarket, and St Neots command strong prices. Norfolk and Suffolk offer more affordable development opportunities with solid demand from local buyers and London overspill.

For developers evaluating regional opportunities, the key metrics to assess are: sales rate (how quickly comparable new-build stock is transacting), price stability (whether values are static, rising, or falling), land availability (whether suitable sites can be sourced at prices that work), and lender appetite (whether finance is readily available). In our experience, the regions highlighted in this guide score well across all four metrics and represent genuine alternatives to London for developers seeking attractive risk-adjusted returns. To discuss specific opportunities in any of these regions, submit your project details and we will provide tailored advice on the finance available.