Every year for the past ten years, Colliers has released a report into the Top UK Residential Investment Cities, and on this year’s tenth anniversary Glasgow has claimed first place.
Glasgow is said to have a 9.3% rental yield, so does Belfast which came in joint position. This percentage massively exceeds the city average of 7.6%.
The Colliers report analyses 20 cities across 24 factors, including everything from earnings and economic growth, to energy efficiency, broadband, culture and rental affordability.
What caused the rise in yields?
The city’s rise is reportedly due to “improvements in net business creation” says Colliers. Broadband connectivity and house price growth have also supported this.
Glasgow has also been seen to be benefitting from robust population growth forecasts and “above average economic momentum”, all the while still retaining an affordability relative to current times.
Affordability
The affordability ratio of 5 for Glasgow, compares similarly yet more favourably to fellow Scottish city, Edinburgh (6.4), but London is shown to be massively inflated at 10.8.
Comparison to other city rankings
Edinburgh came second place and is said by Colliers to be the only city that has appeared in the top five in every edition of the report since 2021.
Edinburgh is proving to be benefitted by its status as capital city which comes with high population numbers and large employment opportunities, encouraging people to move to and live in the city.
London, Cambridge and Manchester are the other cities to make up the top five areas for high yield investments.
London
This year sees London slip from first to third. Colliers says this is due to “slightly softer GDP projections, though it remains the UK’s R&D powerhouse with around 440,000 students and world leading universities including LSE, Imperial and UCL.”
Cambridge and Manchester
“Cambridge re-enters the top tier thanks to the joint strongest GDP growth forecasts in the UK (2.5%), while Manchester maintains its long standing top ten performance across all pillars,” says Colliers.
The report looks for a strong performance within the following pillars: Economics, R&D, Property and ESG.
Diversity in the residential landscape of the UK
Oliver Kolodseike, Head of Economic Research at Colliers added: “This year’s rankings show clear diversification in the UK residential landscape. While some cities are seeing softer economic projections, others, like Glasgow and Cambridge, are strengthening their position through strong GDP forecasts, population growth and improved connectivity. London remains unmatched in R&D strength, but affordability constraints continue to shape investor appetite.”
