Best Cities in Portugal for UK Investors and Expats

Looking to invest or relocate? Discover the best cities in Portugal for UK investors and expats. Get insights on property prices, investment opportunities, and lifestyle benefits in Lisbon, Porto, Algarve, Braga, Coimbra, and Madeira. Updated for 2025.

Mar 12, 2025 - 10:38

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Best Cities in Portugal for UK Investors and Expats

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Portugal continues to be a top destination for UK investors and expats, offering a blend of rich culture, favorable climate, and investment opportunities. The country’s strong economic stability, investor-friendly policies, and tax benefits, such as the Non-Habitual Resident (NHR) tax regime, make it even more attractive for foreign investors. Recent changes in residency programs and a thriving real estate market make it essential to understand the current landscape. This article explores the best cities in Portugal for UK investors and expats, incorporating the latest data and developments as of March 2025.

1. Lisbon – The Economic and Cultural Hub

Lisbon remains a dynamic city attracting global investors and expats. According to a 2024 report by Confidencial Imobiliário, Lisbon has seen a 6% year-over-year growth in property prices, driven by strong demand from international buyers and a resilient rental market. The city offers a blend of traditional charm and modern infrastructure, making it a prime location for real estate investments.

Property Prices: As of January 2025, Lisbon is the most expensive city in Portugal to buy a house, with average prices at €5,718 per square meter.
Investment Opportunities: Despite the termination of the real estate option in the Portugal Golden Visa program in October 2023, Lisbon continues to attract investors through other avenues such as investment funds and business ventures.

2. Porto – A Rising Star for Investors

Porto, Portugal’s second-largest city, has emerged as an investment hotspot. Known for its historic architecture, scenic river views, and growing tech industry, Porto is a fantastic choice for UK investors.

Property Prices: In January 2025, Porto's average property prices reached €3,705 per square meter, reflecting a growing demand in the region.
Market Growth: The city has experienced a 5% real estate market growth in 2024, driven by increasing foreign interest.

3. The Algarve – A Paradise for Retirees

The Algarve is famous for its stunning beaches, warm climate, and relaxed lifestyle, making it a top choice for UK retirees and investors.

Property Prices: While specific data for 2025 is limited, the Algarve continues to be a sought-after region, with property prices averaging €3,250 per square meter as of late 2024, reflecting a 4% increase from the previous year. Prices vary depending on proximity to coastal areas and amenities, with premium locations seeing even higher appreciation.
Lifestyle: The region offers a high quality of life with access to top-tier golf courses, marinas, and healthcare facilities.

4. Braga – Affordable Living with Historic Charm

Braga is a northern city known for its history, quality of life, and affordability. It has been gaining popularity among investors looking for lower property prices and strong rental demand.

Property Prices: As of January 2025, Braga's property prices averaged €1,975 per square meter, making it one of the more affordable options among major Portuguese cities.
Growth Potential: The city's growing economy and educational institutions continue to attract both investors and residents.

5. Coimbra – The Education and Innovation Hub

Coimbra is home to one of the oldest universities in Europe and a thriving student population, making it an excellent city for property investments.

Property Prices: In January 2025, Coimbra's property prices averaged €2,093 per square meter.
Rental Demand: The high demand for student rentals offers investors steady rental income opportunities.

6. Funchal, Madeira – An Island Gem

For those who love island life, Funchal in Madeira offers a unique opportunity for investment and relocation. The region benefits from the International Business Center of Madeira (IBCM), which provides tax incentives for businesses and foreign investors. Additionally, Madeira's special tax regime offers reduced corporate tax rates, making it an appealing destination for entrepreneurs and investors alike.

Property Prices: As of January 2025, Funchal's property prices averaged €3,542 per square meter, reflecting increased interest in its property market.
Market Trends: The property market in Madeira is experiencing a significant revival, driven by a younger, more active crowd, including digital nomads and remote workers.

Conclusion

Portugal offers a diverse range of cities catering to different lifestyles and investment goals. Whether you seek a bustling urban environment in Lisbon, a cultural experience in Porto, a retiree-friendly location in the Algarve, or an affordable yet dynamic city like Braga, there’s something for everyone.

It's important to note that as of October 2023, the Portugal Golden Visa program no longer includes real estate investment as an eligible option. However, applicants can still qualify through other investment categories such as investment funds, business creation, scientific research, or cultural heritage support.

Portugal remains an attractive destination, offering diverse opportunities for investors and expats. Lisbon provides a thriving economic and cultural hub, Porto stands out for its growing tech and tourism sectors, and the Algarve remains a prime choice for retirees due to its sunny climate and strong rental market. Braga and Coimbra offer more affordable options with great growth potential, while Madeira presents tax incentives for investors. With the right city choice, you can enjoy a high quality of life while making a smart investment for the future.