Colliers has released the ninth edition of its Top UK Residential Investment Cities Report, an in-depth evaluation of 20 major towns and cities across the UK based on 24 indicators grouped into five key pillars: economic, research and development (R&D), liveability and cultural appeal, property market factors, and environmental sustainability. This extensive analysis aims to pinpoint urban areas “defining the future of residential investment,” with particular attention to Build to Rent schemes and rental yields amid shifting market dynamics.

In a notable shift from previous editions, London has reclaimed the top spot overall for the first time since the inaugural report in 2021. The capital leads in four indicators and ranks within the top five in eleven, reflecting its abundance of attractions, high leisure business density, and robust R&D environment, supported by a student population exceeding 400,000 and some of the country’s premier universities. However, London scores relatively lower on the property pillar, constrained by high house prices and rents that affect affordability. According to Andrew White, head of residential at Colliers, London’s recent regeneration efforts and the introduction of diverse housing tenures have bolstered its appeal, though he suggests the city’s homeownership profile could continue to evolve without further government support.

Manchester holds second place in the rankings and is described as “the regional city of choice” for both domestic and international investors. Its strengths lie in a vibrant economy, strong student presence, entrepreneurship, and relatively affordable housing. The city’s cultural richness and proximity to natural attractions like the Peak District and Lake District further enhance its desirability for residents. Challenges that remain include lower average earnings, income inequality, and elevated CO₂ emissions, indicating areas where improvements could sustain its rising investment appeal.

Glasgow, which ranked second in the previous report, now occupies third place. The city scores well in property market indicators such as house price growth, rental yield, energy performance (EPC) ratings, and housing affordability. Its diverse retail, cultural, and sporting venues contribute positively to liveability, yet it faces shortcomings including low life satisfaction scores and fewer leisure business options. Edinburgh, while not in the top three in this latest London-focused report, has recently been identified by Colliers as the leading city overall in other versions of their analysis, praised for its strong economy and skilled workforce. Scottish cities, particularly Edinburgh and Glasgow, frequently dominate these assessments, thanks to their balanced performance across multiple indicators.

Other cities highlighted in various editions of the report include Milton Keynes, which has recently emerged as England’s top city for residential investment, ranking third overall behind Edinburgh and Glasgow in some analyses. Its strengths are attributed to forecasted strong economic growth, low unemployment, high earnings potential, and strategic positioning within the Oxford-Cambridge economic corridor. Similarly, cities such as Oxford, Birmingham, Bristol, and Leeds consistently appear across reports, each offering unique combinations of economic vitality, educational institutions, and lifestyle amenities that appeal to investors.

Colliers’ director of research and economics, Oliver Kolodseike, emphasises the objective of these reports is to equip investors with actionable insight to navigate a complex and evolving market. He points out that the report helps identify cities aligned with long-term policy priorities and housing trends, informing capital allocation decisions. The breadth of analysis—covering demographics, rental yields, sustainability metrics such as CO₂ emissions and electric vehicle infrastructure, and social factors like life satisfaction—reflects the diverse considerations shaping residential investment in the UK.

Overall, Colliers’ comprehensive approach underscores the shifting landscape of UK residential property investment. While London has reclaimed prominence due to its unmatched cultural and educational resources, regional cities continue to offer compelling opportunities driven by affordability, growth prospects, and improving sustainability credentials. This nuanced picture serves as a valuable guide for investors balancing yield, risk, and the socio-economic fabric of their target locations.

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Source: Noah Wire Services