Treasure Map: UK City Residential Opportunities, Ranked

X marks the spot in a new geography of top UK residential investment destinations that turns on its head the assumption that property metrics matter most.

Manchester is one of the top five locations for residential investment along with London, Cambridge, Edinburgh and Bristol, but Birmingham lags behind, placed 17th.

The scorings come in a new analysis from Colliers. In principle, this is an objective study based on verifiable data. It is also one that deliberately tips the balance away from purely property considerations to look at a wider, more sustainable picture. 

Colliers based its findings on a range of 20 indicators covering the economy, education, business startups, facilities and property issues such as house price growth, rental yield, affordability, the proportion of renters and the income-to-rent ratio. 

Manchester was placed fifth for its strong house price growth, large share of renters and rapid economic growth. Between 2021 and 2025, Manchester’s economy is forecast to grow at an annual rate of 2.6%, with only London expected to perform better (2.7% per annum). But the city was marked down for rental affordability due to relatively high unemployment and relatively low average earnings.

Birmingham was ranked low, despite scoring high on property metrics. The city was placed 17th out of 20. Although Birmingham did well on most education issues, and was in the top four of six on property criteria, overall economic performance and quality of life issues pulled it down. This was due to relatively high unemployment, low earnings and a high degree of income inequality. Life satisfaction and density of leisure facilities are also pulling Birmingham down in the liveability category.

Cambridge, heading the list, scored relatively poorly on the pure property metrics, with a relatively small catchment area as well as muted house price growth, low rental yields and affordability issues. Its facilities and dynamism helped push it to the top.

Reading, York, Milton Keynes, Leeds and Belfast also made it to the top 10.

“It’s easy to focus on only one element of an investment opportunity, such as the economic health and potential of a certain area,” Colliers deputy chief economist Oliver Kolodseike said. 

“We have conducted a deeper dive across different categories of interest that may be relevant to various groups of individuals from developers to occupiers to investors.”