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Regional cities provide investors with key to unlocking residential growth

18 08 22 Regional cities provide investors with key to unlocking residential growth hero

Colliers’ Top UK Residential Investment Cities report hones in on cities with positive economic and asset growth potential.


Investors looking for residential investment opportunities should turn their sights to the UK’s regional cities, according to the latest research by Colliers.

The commercial real estate firm analysed 20 cities across the UK and found that when focusing on drivers such as house price and GDP growth, rental yields, affordability, population earnings, share of renters and unemployment statistics the cities with the strongest opportunities were mainly outside of the south east.

According to the H1 2022 analysis the cities that have performed most favourably recently are:

  1. Glasgow
  2. Edinburgh
  3. Belfast
  4. Reading
  5. Liverpool
  6. Manchester
  7. Leeds
  8. Bristol
  9. Milton Keynes
  10. Sheffield

Kevin Coughter, associate director in the International Residential team at Colliers commented: “It’s unsurprising that London was not the top city recommended for residential investment due to the slow down in house price growth compared to other areas, however to see that only one location in the south east made the top ten is worth noting. Many investors are looking to secure properties that will provide a long term return, although typically they will be drawn more towards cities such as Glasgow and Edinburgh which have a presence on the international stage either as conference locations, or venues of cultural significance. However, with our analysis we can also highlight other areas which could be just as advantageous.” 

Glasgow scooped the top spot due to its strong house price growth with the average price of a flat growing 36 per cent in the five years to March 2022, as well as average rental yield being 8.0 per cent, and the city’s affordability ratio of 5.4 times the average annual income.

Scotland’s capital city Edinburgh also looks favourable to investors due to its similar level of five-year property price growth, as well as a strong economic performance and population growth, as well as low levels of unemployment. 

Belfast was ranked third best place for property investment in the analysis due to its affordable housing, having the highest share of renters amongst the cities considered, and a rental yield of 7.4 per cent.

The only location in the south east to make the top ten list was Reading, ranking fourth, due to the area’s GDP growth predicted to be 2.5 per cent between 2022 and 2026, and the area’s population benefitting from strong earning performance and low levels of unemployment. 

Amongst the analysed cities Liverpool in fifth had the strongest property price growth over the last five years at 47 per cent, as well as having the best affordability ratio of 5.4. The cost of renting is on average only 14 per cent of earnings, compared to 27 per cent in London.

Oliver Kolodseike, head of Economic Research at Colliers, added: “Our research considers 25 indicators across five main pillars of economics, property, liveability, research and development, and added in to this latest report, environmental factors. The strength of this report is that it can be tailored to an investor’s needs. The combination of the two pillars of economic and property will be particularly interesting for investors focusing on strong economic fundamentals and locations that benefit from affordable housing and strong rental yields.”

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Kevin Coughter

Associate Director

Residential - International Properties

London - West End

Kevin began his career wotrking in the Square Mile with Merrill Lynch on their FX desk before making the decision to trade property as a commodity instead. Since then he has gone on to acquire over 27 years experience in the London real estate markets having working for respected estate agents covering residential sales and lettings, a private developer conducting acquisition and resale work. More recently he spent a number of years working for a Private Family Office dealing with global UHNWI's and corporate clients offering residential investment acquisition and disposal strategies before moving into the Prop-Tech sector working for an online property disruptor. In 2017 he joined Colliers dealing with the domestic sale of residential new build developments in London and the Home Counties. In 2019 Kevin moved to the International Properties team overseeing our residential project marketing strategy to our global database of buyers.

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Oliver Kolodseike

Director of Economics and Research

Research and Forecasting

London - West End

Oliver is Head of Economic Research and leads the quarterly UK forecasting process including the publication of Colliers' Real Estate Investment Forecasts (REIF) report. He also  authors the monthly Property Snapshot and, quarterly Scotland Snapshot. Prior to joining Colliers, he worked for the Centre for Economics and Business Research and IHS Markit. Oliver holds a BA in Economics from  Georg-August University Göttingen (Germany) and an MSc in Economics from Exeter University.

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Kristy Watt

PR Executive

PR

London - West End

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