" With Glasgow and Manchester both undergoing significant investment and regeneration, we believe they offer the greatest potential"
When compiling data from official Hometrack and Zoopla reports, both Glasgow and Manchester scored 28 out of a possible 30.
Glasgow came out top on rental yield with 6.8%, receiving the perfect score of 10. The Scottish city also came out well on both annual property value percentage increase (14.1%) and transport links.
Manchester also took the top spot, receiving a score of 28 with high marks across all three metrics, particularly in annual property value percentage increase (15.6%) and transport links. Whilst the rental yield for Manchester came out slightly lower than that of Glasgow, at a rate of 5.1%, the property market in the city continued to demonstrate high demand and a growing population, pointing towards an attractive rental market.
Not only that, but Manchester is the home of Media City and has the presence of 80 of the FTSE 100 companies and two premiership football teams which makes it an attractive place for investors looking to attract high-net-worth individuals to rent their properties.
Sheffield, Bristol, and Edinburgh completed the top five, with rental yield scores ranging from five to eight and annual growth percentages from seven to eight, with these cities all offering competitive returns on investment.
In addition, Sheffield’s average house prices are relatively affordable compared to other regions, making it attractive to investors looking to maximise their budget. On the other hand, Bristol and Edinburgh topped the list for property prices, suggesting they would be more appropriate for investors looking to benefit from regions with less risk of market downturn and higher rental prices.
Birmingham and Nottingham received modest scores, both totalling 19. These cities scored well in terms of rental yield, with scores of six and eight respectively, and offer relatively affordable average house prices with strong potential for future growth. While their transport links scored slightly lower than most of the top-ranking cities, both Birmingham and Nottingham are undergoing significant regeneration projects and attracting major businesses, which is expected to boost demand for rental properties in the coming years.
For investors looking for long-term growth potential, these cities offer a compelling investment opportunity.
Liverpool, Cardiff, and Leeds rounded out the list, scoring 18, 17, and 16 respectively. Liverpool scored particularly well in rental yield and transport links, the Welsh capital scored moderately in all three metrics, whilst Leeds scored high in rental yield.
Gordon Dutfield, CEO at Redmayne Smith, commented:
“Rental yield and annual property value percentage increase are key indicators of the potential for strong returns on investment, while transport links are crucial in attracting tenants and maintaining demand.
"We believe these three factors offer the most accurate picture of a region's investment potential and are the most important things for investors to consider when selecting where to invest in the UK property market. By focusing on these key metrics, we can identify regions that offer the best opportunities for long-term growth and profitability, and help our clients achieve their investment goals.
“Our latest research clearly shows that Glasgow and Manchester are currently the best regions to invest in, with excellent rental yields, high annual property value increases, and great transport links. As we emerge from the pandemic, investors are increasingly looking for opportunities in major UK cities, where the potential for growth and returns is high.
"With Glasgow and Manchester both undergoing significant investment and regeneration, we believe they offer the greatest potential. Personally, Manchester is the place I believe to be one of the best places to invest and this is where I’m focusing my time at the moment – investing in key areas in the city where I’ll see the most return.”