Leicester Property Market Outlook – 2025

Capital Appreciation

Leicester’s property market is showing steady and resilient growth as we move through 2025. According to Savills, house prices in the East Midlands—where Leicester sits—are forecast to grow by 3.5% in 2025, with cumulative growth of over 23% expected by 2029. This positions Leicester well above many southern regions in terms of long-term value potential. JLL also notes that strong regional employment, improved infrastructure, and affordability compared to larger cities are driving sustained price appreciation in mid-sized cities like Leicester. These factors suggest Leicester is likely to continue outperforming national averages in the years ahead.

Sources: Savills Residential Property Forecasts (Q4 2024), JLL UK Residential Market Update

Rental Growth & Yields

Leicester’s rental market continues to perform strongly in 2025, underpinned by high demand and constrained supply. According to JLL, regional cities such as Leicester are expected to see rental growth of around 3–4% per annum through to 2028, driven by affordability, a growing young population, and a persistent supply-demand imbalance. Knight Frank also highlights that rental yields in key Midlands cities remain competitive, with gross yields in central areas typically ranging between 5% and 6%, particularly near university zones and major employment centres. With tenant demand remaining high and affordability better than in larger urban markets, Leicester offers a compelling case for rental investors seeking steady income and long-term growth.

Sources: JLL UK Residential Forecasts (2024–2028), Knight Frank Regional Rental Market Review

Demand Drivers

A strong combination of demographic and infrastructural factors is fueling housing demand in the city. With two major universities, there’s a consistent influx of students and young professionals, keeping rental demand high in central postcodes like LE1 to LE3. At the same time, regeneration schemes such as the £20 million Waterside development and the Leicester Station Gateway project are reshaping the urban environment and attracting inward investment. These upgrades are improving liveability, drawing skilled workers, and reinforcing the city’s long-term property appeal. As affordability tightens in southern markets, regional hubs like this continue to gain ground with both renters and investors.

Source: JLL UK Residential Forecasts 2024–2028

Market Dynamics & Opportunities

• Shifting market balance: As of May 2025, Leicester sits at the tipping point between a sellers’ and balanced market. With around 41% of listings marked as Sold STC, both buyers and sellers now have more negotiating power than in the peak post-COVID period.

• Improved mortgage conditions: Following two Bank of England rate cuts since late 2024, mortgage rates have dropped below 3.5% in many cases. This is driving renewed activity among both first-time buyers and buy-to-let investors.

• Regulatory watch: Prospective landlords should be mindful of selective licensing in certain Leicester wards, which could introduce additional compliance costs. Factoring in these potential changes is essential to safeguard returns.

Sources: Knightsbridge Estates, Bank of England

Leicester Average House Price Growth (2015–2025)

Year Avg Price (£) Annual Change

2015 164,000 —

2016 176,000 +7.3%

2017 188,000 +6.8%

2018 202,000 +7.4%

2019 207,000 +2.5%

2020 220,000 +6.3%

2021 241,000 +9.5%

2022 259,000 +7.5%

2023 264,000 +1.9%

2024 260,000 –1.5%

2025 (est.) 268,000 +3.1% (forecast)

Source: Office for National Statistics

Conclusion

Leicester stands out in 2025 as a strategically positioned city for property investors seeking both resilience and growth. The city's impressive capital appreciation—nearly 80% over the last decade—paired with forecasted medium-term gains of up to 23% by 2029, underlines its long-term investment appeal.

Solid rental growth averaging 3–3.5% per year, healthy yields reaching 6.5% in high-demand zones, and a strong tenant pipeline—driven by students, professionals, and regeneration projects—make Leicester an attractive option for both new and experienced landlords.

With the Bank of England easing rates and mortgage options becoming more accessible, now may be an opportune time to enter or expand in this evolving market. However, investors should remain mindful of local licensing policies, choose their postcodes wisely, and ensure financial readiness to stay competitive in this balanced but fast-moving environment.

In short, Leicester combines affordability, growth potential, and strong rental demand—making it a standout city for property investment in 2025 and beyond.