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Derby Property Market in 2025
Thinking about property investment? Look no further than Derby. This East Midlands city has quietly positioned itself as one of the UK’s best places for long-term investment.
This is driven with steady property price growth and solid rental yields. And let us be real. When it comes to property investment Derby is not as flashy as London or Manchester. But there is a certain charm in that. The numbers speak for themselves and they are calling for attention.
As per the reports of Savills since 2020 Derby property prices have surged. This is partly due to people seeking affordability beyond the capital. A whopping 60% increase in property transactions back then was noticed.
This shows the early signs of what is now shaping into a sustained trend. For investors looking towards 2025 the forecast suggests around a 5.5% increase in Derby property prices. This is accompanied with demand driving growth further.
That is a comfortable pace. Just right for those who do not want the highs and lows of more volatile markets. But still want meaningful gains over time. JLL has projected an East Midlands growth rate of 16.5% between 2024 and 2027.
If you want to know the Global Real Estate Perspective in August 2024 then here is an exclusive report by JLL on global property market trends and insights.
The population has a higher proportion of 19 to 35 age groups. They often look to rent in or around Derby city centre. With average rents climbing steadily.
Buy to Let investors can expect stable rental income. This is done while watching their property’s capital appreciate. That young demographic combined with Derby’s improving connectivity makes it a sweet spot for generating passive income. Also it is better for building a retirement nest egg over time.
Do not overlook the impact of big employers like Bombardier Transportation either. The city’s growing job market boosts demand for quality rental properties. This keeps occupancy rates high.
Derby Property Prices in 2025
In terms of property prices Derby has managed to stand out in the East Midlands for all the right reasons. Over the past decade Derby property prices have risen by around 55%.
You can analyse this change from the below graph.
Source: House Price Statistics
This growth is backed by nearly £3 billion in investments pouring into the city. For 2025 the outlook is equally promising. Despite economic headwinds Derby has shown a resilience that few other markets can match.
This includes inflation plus interest rate hikes. The mortgage prices increased by about 2% from 2023 to 2024. With this the city has outperformed inflation.
With all these Derby has earned a spot as the UK’s 6th best property hotspot as per the Property Market Index. But what is really exciting for investors is the Derby City Centre Masterplan.
This is a major £3.5 billion project. It is designed to enhance connectivity and infrastructure. With this development Derby property prices are expected to climb by around 11% by 2025.
It is a step towards building a passive income stream with solid yields. The East Midlands is positioned for strong growth. Investing in Derby property now may mean getting ahead of a market that is only gaining momentum. Each year the city evolves and demand continues to grow.
Derby Rental Prices in 2025
According to ONS the rental values increased by 10.4% as of August 2024. Here rental yields have reached as high as 6% in the city centre. This makes it one of the East Midlands’ best places for stable income generation.
One key driver?
The growing rental demand from Derby’s young and active population. Among these many may fall into Generation Rent. As per Derby City Council this is a national charity that campaigns to make renting in the private sector fair and safe.
With the cost of buying a property rising, more people are looking for quality rental options. Along with this over 7,000 people are currently waiting for council homes. Hence the appetite for rental units is clear. The city’s student population also adds to this demand.
Looking ahead to 2025 rental demand in the city is expected to remain strong. As property prices continue to climb, rental demand should grow alongside.
This allows investors to capture both capital appreciation and reliable rental income together. Derby’s mix of affordability plus high yields and increasing demand places it high on the list. Especially for those interested in a long-term rental investment.
With the city’s improvements in infrastructure and connectivity, buy-to-let investments in Derby could prove rewarding over the coming years.
Variety of Property Types
- Derby
Deposit
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Yield
Property Price
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Derby Supply and Demand
Supply and demand are like the heartbeat of the Derby property market. They always push and create movement in prices and rents. Right now Derby’s property supply is lagging well behind demand.
This is a goldmine for those thinking about long-term property investments. The city’s population is currently over 267,000. And expected to increase by 5.3% over the next two decades.
The demand for properties is only going up.
This lack of supply is part of what is driving both house prices and rental yields higher. The demographic mix in Derby is nearly half of the population under 35. This adds another layer to this demand.
Especially as many younger people are choosing to rent rather than buy, this generation along with over 30,000 students in Derby has made renting a staple in the city.
They are often drawn to central locations with access to transport and amenities. This only boosts the appeal of properties in the Derby city centre.
For property investors this supply-demand imbalance is a significant factor in Derby’s positive property market forecast.
As the population grows the undersupply of housing will likely intensify. It will create an even stronger rental market. As we discussed above the city’s major employers like Bombardier Transportation contribute to a stable job market.
This supports the demand for housing and rentals alike. Investing in Derby now could mean securing a property that appreciates in both value and rental income. Makes you a strong candidate for a profitable and long-term investment.
Trendy House Prices and Monthly Rent In Neighbouring Areas
| Neighboring Area | Average Property Price (August 2024) | Average Monthly Rent |
|---|---|---|
| Derby | £209,000 | £771 |
| Nottingham | £199,000 | £932 |
| Leicester | £228,000 | £938 |
| Stoke-on-Trent | £147,000 | £618 |
| Derbyshire Dales | £328,000 | £769 |
Source: Office for National Statistics
Derby House Prices and Nearby Cities
Yearly average nominal prices
Source: Plumplot
Get full enclosure on the trendy house prices and monthly rent of neighbouring areas here on “House Prices in Derby.”
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Derby Past Performance
Average House Price in Derby
One needs to pay £209,000 to buy a house in Derby as of August 2024. In 2023 this price was around £205,000. This means there is a 2.2% increase in average house prices in Derby.
This steady price rise after 2023 reflects growing demand and interest in Derby. The city became a prime spot for property investment. The East Midlands average sits at £250,000 and the national average reaches £296,000. Derby continues to offer a more accessible entry point for property investors in the UK.
Have a look here. This shows the housing prices of different property types.
Derby House Prices by Property Type
Yearly average nominal prices
Source: Plumplot
| Property Type | Current average price (2024) |
|---|---|
| Detached | £331K |
| Flat | £110K |
| Semi-Detached | £208K |
| Terraced | £161k |
Average Private Rents Rose in Derby
The rental market in Derby has seen quite a shift over the past year. By September 2024 the average monthly private rent had reached £771. This marks a significant 10.2% increase from £700 in September 2023.
This spike is part of a larger trend reflecting Derby’s growing appeal and strong demand for rental properties. Derby’s high rental yields are a big draw for investors.
Comparatively Derby’s rental growth outpaced much of the East Midlands. Here the average rents rose by 8.8%. This city’s rental market is quickly establishing itself as one of the East Midlands’ best places for investors.
Especially for those who are seeking strong yields and consistent demand. Flats and smaller properties in the Derby city centre have been driving much of this demand. The city’s younger population and professionals looking for well-connected locations continue to rise.
Have a look at this graph
Source: Office For National Statistics
Below is the average rent earned on various bedroom types.
Source: Office For National Statistics
By how many bedrooms there are in a property, average rents as of September 2024 in Derby were:
- One bedroom: £540
- Two bedrooms: £693
- Three bedrooms: £837
- Four or more bedrooms: £1,185
Taking the data instead by property type, average rents were:
- Flats and maisonettes: £635
- Terraced properties: £754
- Semi-detached properties: £818
- Detached properties: £979
Investments here are pouring into infrastructure plus connectivity and amenities. Derby’s rental properties are in high demand. Particularly in popular areas around the city centre.
This means Derby is a place with affordable property prices for you as an investor. It is a city where the value of rental properties is expected to continue rising. This makes it a compelling choice.
Is Derby a Good Place to Invest in Property?
When looking at the house price forecast in Derby there is a lot to consider. And nearly all signs point to it being a highly favourable spot for long-term growth and income potential. Derby’s property market has shown strong resilience and consistent growth.
With the average house price in Derby reaching £209,000 as of August 2024. It has been rising by 2.2% from the previous year. It is clear that Derby property prices are on a steady upward trend. This growth is especially attractive for investors seeking portfolio building.
One of the unique selling points of Derby is its position within the East Midlands. This is generally more affordable than other regions. But it sees above average growth rates.
East Midlands’ average house price is £250,000 and the national average is £296,000. Compared to this Derby is relatively accessible. This makes it ideal for investors aiming to secure properties at manageable prices while still capitalising on growth.
In addition, Derby’s rental market has been especially dynamic. Several key developments are also propelling Derby’s property market forward. The Derby City Centre Masterplan is a multi-million-pound investment, aimed at revitalising the city centre with new amenities plus residential spaces and workplaces.
This includes projects like the Becketwell Performance venue plus the £20 million hi-tech business park. This is transforming Derby into a modern and appealing place to live and expecting to drive demand for housing in the city centre. They are boosting house prices in Derby and potentially increasing rental yields.
Also Derby’s has a strong job market. Particularly with major employers like Bombardier Transportation. It creates a stable environment for housing demand.
Jobs in advanced manufacturing and technology are coupled with educational expansions. Like the University of Derby’s planned business school and the £13 million East Midlands Institute of Technology.
These are expected to attract mostly the professionals and students. These groups make up a significant portion of Derby’s rental demand. And supports sustained rental income for investors.
Another factor worth noting is Derby’s excellent connectivity. There is easy access to major motorways and train routes. Derby is well connected to other cities in the UK.
This includes London plus Birmingham and Manchester. This connectivity is not only convenient for residents but also increases Derby’s appeal for businesses.
For long-term capital appreciation plus portfolio building and consistent rental income Derby ticks all the right boxes. It combines affordability with promising growth prospects.
This is backed by strategic developments and strong local employment. The city continues to attract new residents and boost its economic profile. Derby could be one of the best places in the UK for property investment right now.
Conclusion
A few things stand out when you consider property investment in Derby. This includes its resilience plus affordability and room for growth.
Derby’s property market is quietly evolving with steady house price growth and increasing rental yields. This makes it a solid choice for those looking to invest in the UK.
Derby’s location in the East Midlands is strategic. It provides solid connectivity to major UK cities like London and Birmingham. This adds to its appeal.
The Derby City Centre Masterplan and other ambitious developments are transforming the area into a dynamic hub. Especially for work plus study and leisure. This rejuvenation is paired with the city’s increasing population of young professionals and students.
It suggests ongoing demand for rental properties. It is ideal for buy-to-let investors seeking consistent income.
Rental prices rose by over 10% in the past year. These are a testament to the high demand. And with an average rent of £771 Derby continues to provide yields that attract serious investors.
Major employers also strengthen the local job market. This ensures a stable demand for quality housing.
There is upgrade in new housing plus job opportunities and infrastructure. Derby’s potential for long-term capital appreciation and reliable rental income is strong. This markes it as one of the East Midlands’ best places to invest in property right now.
Area Guide
Ricky Ellson
Firstly and foremost, I have been a dedicated senior advisor for many years (not to give away my age!
My strong work ethic has provided a solid track record of successfully building portfolios for many clients.
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