London has been crowned as the premier destination for residential property investment in the UK, real estate firm Colliers says.
It’s the first time that London has been at the top since 2021, when the firm’s Top UK Residential Investment Cities Report was published.
Manchester secures second place, lauded as ‘the regional city of choice for both domestic and international investment’.
The firm assessed 20 major towns and cities using 24 indicators grouped into five key categories: economic vitality, research and development, liveability and cultural appeal.
It also looked at property market dynamics and environmental sustainability.
London’s consistent regeneration
The firm’s head of residential, Andrew White, said: “After a period of stagnation amongst the top five, in our latest analysis we’ve seen some movement, and for the first time London has reached the top spot in our ranking.
“Being a capital city is always a double-edged sword: businesses, particularly financial institutions gravitate towards the location, and with that comes some of the strongest GDP forecasts, highly educated population and strong leisure offerings.
“However, these are matched with high house and land prices, higher labour costs and significant wealth inequality making homeownership increasingly challenging.”
Manchester’s investor appeal
Collier’s says London’s position is driven by its dominance in four indicators and strong performance in 11 others, particularly in cultural attractions and leisure facilities.
With a student population exceeding 400,000 and some of the nation’s best universities, the capital outshines Cambridge and Oxford in the research and development category.
However, high house prices and rents slightly weaken its property market score.
Manchester’s robust economy, significant student presence and thriving business environment help boost its investor appeal.
The city’s vibrant cultural offerings and proximity to scenic areas like the Peak District and Lake District further enhance its attraction for residents.
However, challenges include relatively modest earnings, income disparities and high CO₂ emissions.
Glasgow is third
Glasgow, previously second, now ranks third and the city excels in house price growth, rental yields, energy performance credentials and affordability.
Its rich array of retail, cultural and sporting venues makes it a compelling choice for homebuyers.
However, lower life satisfaction, weaker economic metrics and limited leisure business density present areas for improvement.
The report‘s other cities for investment potential include Belfast, Birmingham, Brighton, Bristol, Cambridge, Cardiff and Edinburgh.
The list also includes Leeds, Liverpool, Luton, Milton Keynes, Newcastle, Oxford, Reading, Sheffield, Slough and York.