Property investment

Edinburgh tops target list for Middle East investors

Victoria Street
Edinburgh’s charms are proving popular with Middle East investors

Edinburgh has leapfrogged the north of England powerhouse cities as the top choice for Middle East investors looking to put their money in the UK property market, according to new research.

A third (33%) of enquiries from investors from the Middle East (predominantly UAE and Saudi Arabia) so in the first half of this year, have been for real estate investment opportunities in and around Edinburgh.

The research from property investment company IP Global reveals that this is sharply up from last year when fewer than 1 in 10 enquiries (8.5%) about Edinburgh came from Middle East investors.

In the year to date, Edinburgh has received more enquiries than York, Manchester and Sheffield, though the north of England is still proving highly appealing to UAE and Saudi buyers. These three cities account for more than half (56%) of enquiries.

Scotland’s capital now ranks as one of the top three UK markets for property price growth in 2024, according to Zoopla.

Global corporations like Amazon, Microsoft, and IBM enhance Edinburgh’s appeal as a business hub, boosting its job market. The working population has grown by 21% over the last 20 years, three times Scotland’s average, with the total population expected to reach 570,000 by 2035, a 27% increase since 2000.

Economically, Edinburgh’s GDP has increased by 182% since 2000, reaching GBP 33.1 billion in 2023. House prices have risen by 49.3% since 2015, with a projected further increase of 17.6% by 2027. 

UK cities attracting the most interest from Middle East investors in 2024

City (UK)% of enquiries from Middle East investors

William Page, Head of Global Sales of property investment company IP Global, based in the Middle East said: “Despite a challenging and uncertain economic environment, and the prospect of a new Government, the UK property market remains an attractive market for investors from the Middle East due to the persisting undersupply of housing, which continues to drive up property and rental prices.

“Historically, London has been seen as a safe haven for overseas investors. However, many are now seeking attractive investment returns elsewhere. Last year, the Northern Powerhouse drew buyers away from the capital, with Manchester and Sheffield becoming highly attractive property markets offering very healthy rental yields and capital growth.

“This year, Edinburgh has leapfrogged the Northern Powerhouse region as a prime destination for property investors, driven by its growing economy, strong job market, and rising property values.

“A 2023 back-firing rental cap, which was quickly scrapped due to unintended high rental price growth, solidified Edinburgh’s position as one of the UK’s strongest rental markets.

“We have also seen the emergence of York as an investment hotspot. There is a housing supply shortage which is creating a favourable market for property investors. House prices rose by 29.2% from 2017 to 2022, and properties are selling faster than in nearby cities like Leeds, Liverpool, and Newcastle.”

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