Edinburgh has overtaken Manchester and Sheffield as the most sought-after location for Middle Eastern property investors, according to new data.

New research from international property investment company IP Global reveals a surge in interest from Middle Eastern investors looking to buy in the Scottish capital.

Inquiries from venture capitalists in the Middle East jumped from just 8% in 2023 to a staggering 33% this year.

While interest in the North of England remains strong – with Sheffield, York and Manchester accounting for over half of all enquiries – Edinburgh now reigns supreme.

What’s Driving Edinburgh’s Popularity?

The Scottish city boasts a thriving economy and robust job market, and is widely recognised for its rich culture and heritage.

These factors, alongside consistent rises in property values, have cemented its place as a leading destination for global property investors.

Zoopla, one of the UK’s leading property websites, predicts that Edinburgh will be among the top three UK markets for property price growth in 2024.

And despite the Scottish Government declaring a national housing crisis in May, fuelled by soaring house prices across Scotland and the rest of the UK, investors from the Middle East are still drawn to Edinburgh’s booming rental market.

Rental Cap Backfire Boosts Edinburgh’s Appeal

The city’s attractiveness to buy-to-let investors was further enhanced by the short-lived rental cap introduced – and swiftly abandoned – earlier this year.

The policy, designed to curb rising rental costs, backfired dramatically and led to even higher rents.

Is London Losing Its Lustre?

William Page, Head of Global Sales at IP Global in the Middle East, explains: “Despite a challenging economic environment, the UK property market remains attractive to Middle Eastern investors. This is largely down to a chronic shortage of housing that continues to push up property and rental prices.”

He adds: “London has traditionally been a haven for overseas investors. However, many are seeking better returns elsewhere. Last year, it was the Northern Powerhouse that tempted buyers away from the capital. This year, Edinburgh has become the prime destination, driven by a growing economy, strong job market, and increasing property values.”