Two Scots cities spearhead list of UK residential investment hotpots revealed by Colliers

Scotland leads the pack in latest prestigious listing of UK residential investment spots.

Scottish cities have bagged the top two places in a major new ranking, by a major commercial property player, of the UK’s top residential investment cities.

Colliers has revealed that Edinburgh has returned to pole position in the firm’s sixth edition of its report, covering the second half of 2023, with the Scottish capital having always featured in the top two rankings since the report’s inception in the first half of 2021. It was found to have ranked top due to its strong economy, skilled workforce, as well as a high proportion of properties with an Energy Performance Certificate (EPC) rating of C or above – and it was also calculated to have an average flat price of £257,792, with an affordability ratio of eight.

Glasgow took second place, having had a steady rise through the report’s rankings from 11th in the first edition, and Scotland’s largest city’s latest high ranking is attributed to the affordability of housing stock, strong rental yields for investors, and, again, properties that are “generally more energy efficient”. It was found to have an average flat price of £153,077, with an affordability ratio of 5.3.

Andrew White, head of residential at Colliers, whose Scottish office presence encompasses both cities, said: “Edinburgh has once again secured the top spot for our UK Residential Investment Cities report thanks to its quality housing stock, diverse economy and residents reporting satisfaction with living in the area. The city also boasts a good range of tourist attractions, access to nature, as well as good earning potential for residents.

“Glasgow has been a steady climber in our rankings over the last three years; it’s always had good property potential due to the affordability of properties, and in more recent years we’ve seen earning potential and entrepreneurship start to flourish in the city, which is also helping to sustain its rise.”

The biannual report analyses 20 locations across the UK against 24 indicators, such as population growth, EPC rankings and leisure facilities, which are grouped into five pillars: economy, research and development, live-ability, property and sustainability. The remainder of the top ten cities comprised Milton Keynes in third place, followed by, in order, Manchester, Cardiff, Oxford, London, Reading, Cambridge, and Leeds. Colliers in its report for H2 2022 said the Scottish capital came second, followed by Glasgow in third place.

Oliver Kolodseike, director in the research and economics team at Colliers, said: “The Scottish cities both excel for different reasons in our analysis; Edinburgh clearly benefits from being the financial centre for the country, and as such we see higher earnings potential and higher housing prices – there’s a lot of strong educational institutions in the area as well. However, Glasgow has had strong house price growth in recent years, and scores top in our analysis of EPC rankings, which makes it attractive to investors as well as homebuyers looking to use their property as a long-term investment.”

Edinburgh was found to have ranked top due to factors such as its strong economy and skilled workforce. Picture: Lisa Ferguson.

The report comes hot on the heels of a new ranking of Scotland’s most expensive streets, with Ann Street in Edinburgh, known for its “stunning” aesthetics and classic Georgian architecture, ranking top for the second year in a row. Glasgow also made the top ten list published by Bank of Scotland.