Best Tourist Cities in the UK

North vs South

London undoubtedly sees the highest number of tourists. In the South, alongside London, the likes of Brighton, Bath, and Cambridge are some of the best tourist cities in the UK. However, the South is home to more affordability constraints. In recent house price growth, the South has experienced dropping house prices. However, renting remains cheaper than buying, down to monthly rental payments and mortgage repayments. In the North-South divide, London offers rent as high as £2,053pcm and property prices averaging £522,000 versus the North East average rent at £649pcm and house prices at £109,000.

While tourist hotspots like London, Bath, and Oxford may seem like the best tourist cities in the UK to benefit from holiday lets, rental yields can be low. High and growing rental prices in the South may be appealing, but the cost to buy makes the window to profit much smaller than what is found in the North. The North offers some of the most rewarding rental yields in the country. In the North, average rental yields are above 6%. The North East even sees highs of 7.2%!

With some of the highest rental yields found in the best tourist cities in the UK, investors can greatly benefit from short-term holiday rentals. York, Newcastle, and the Lake District are among some of the most-visited locations in the North. However, investors should look at tourist figures and see which locations offer the more profitable returns.

1. London

It is far from surprising that London takes the top spot. From the royalty of Buckingham Palace and the Changing of the Guard to the iconic attractions like the Tower of London and the unique delights of Camden Market – people from all over the globe and the country itself travel here. With footfall of 16.1 million last year, a full 15 million more than the second-highest city for visits, London is undoubtedly the best tourist city in the UK.

However, prices are the highest in the country. So much so that investors living in London are buying their investments in the North. While the capital may receive the highest footfall of tourists, rental yields are 4.2% and property prices average £533,000. Yields are 0.83% below and house prices are £270,000 more than the national averages. This difference in house price itself is even higher than the £263,000 average. With these figures in mind, property investment in London is not recommended.

3. Birmingham

Birmingham may be the UK’s second-largest city, but it is known more as ‘Britain’s most exciting food destination’. The benefit of visiting the largest city in the UK outside London is the large array of attractions, eateries, and accommodation.

The city is a favourite family destination for the likes of Cadbury World, Legoland, and Sea Life. Most recently in 2022, Birmingham was the host city for the Commonwealth Games, which was the largest sporting event in the UK to follow the 2012 London Olympics. But Birmingham is also a top location for business trips. Be it conventions or conferences, Birmingham’s NEC events never cease demand for short-term rentals. Great opportunities arise alongside Birmingham’s projected house price growth.

Birmingham is certainly one of the best tourist cities in the UK for diversity, be it for family trips, a halfway point for long-distance drives, or Birmingham’s more unique attractions like The Coffin Works or fantastic food destinations. With Curzon Street Station enclosing towards completion, too, Birmingham will stretch out tourism potential through its new, high-speed rail routes.