Gulf Investors’ Top British Cities for Real Estate Investment

Investment in the Arabian Gulf is significant, with Gulf investors being highly sought after globally, particularly in the United Kingdom’s real estate market, which attracts substantial capital and generosity for various projects.

These investors will continue to find British real estate appealing through 2026 due to several factors, including political stability, a clear legal system, and a variety of opportunities to produce high rental yields in addition to consistent capital growth.

London has remained the top choice for Gulf investors, representing 23% of all real estate demand from the region over the past year. Nomo’s analysis draws this conclusion, which specialises in Sharia-compliant real estate finance, utilising data from the UK real estate portal Rightmove. As the capital, London’s appeal is predictable.

The emergence of other British cities that are starting to rival—and possibly even outperform—London this year is noteworthy, though. For example, the North West of England accounted for 18% of Gulf-based demand, while Scotland accounted for 19%. In addition to the possibility of higher rental yields, this trend reflects investors’ search for markets with lower entry costs than London.

A 6% increase in demand for homes and a 5% increase in buyers upsizing to larger properties indicated a growing desire for long-term stability within the British market—often referred to as “second-steppers.”

Examining the top British cities that are well-positioned to compete with London in the real estate market by 2026 is crucial, given market experts’ forecasts regarding the current shift in Gulf investment toward northern cities and the Midlands.

Top British Cities for Real Estate Investment

Birmingham

We begin with Birmingham, a city that will see substantial real estate growth both this year and in the years to come. Driven by major projects that have already reached the actual implementation phase, this outlook is solid.

The new ‘Sports Quarter’ project in Bordesley Green, which focuses on building a state-of-the-art stadium with 62,000 seats for Birmingham City Football Club, is one of the most notable of these projects. The project will develop into a comprehensive sports and entertainment hub capable of hosting major concerts and international sporting events. This development is likely to increase demand for real estate in the east of the city, similar to what happened with Manchester’s Etihad Stadium project.

In addition, the massive £1.9 billion Smithfield project will begin its first phase in 2026. Property prices in nearby areas like Digbeth and the city centre will be directly impacted by this initiative, which entails turning the former wholesale markets into a new district with recreational, commercial, and residential amenities. This is in addition to the new Curzon Street station, which will reduce travel time to London by about an hour, and the HS2 high-speed rail project.

The B1 and B18 postcode areas in Birmingham’s city centre have rental yields between 6% and 6.7%, which are higher than the average yields in London. The city’s average property price is around £234,328, and over the last five years, rents have increased by 55.9%, while London’s property prices have increased by 18.8%. Birmingham’s real estate prices are expected to rise by 5% to 7% between 2025 and 2026, then 4% to 6% the following year, and then 3% to 5% until 2030.

Manchester

Gulf investors consider Manchester to be a top real estate investment destination. The city has developed into a global centre for investment in recent years, competing with major cities in Europe. Due to new innovation projects and local economic growth, real estate interest has spread outside of the city centre, a trend that is predicted to last until 2026.

The “Atom Valley” project, which will see the opening of the Sustainable Materials and Manufacturing Centre in the summer of 2026, is one of the most important of these projects. It is anticipated that this will increase housing demand in new areas like Rochdale and Bury. With roughly 51% of university graduates choosing to live and work in Manchester, the city has the highest graduate retention rate outside of London. This feature guarantees a steady demand for residential units.

The city’s advantages, however, can also pose problems. Data show a glaring supply-demand imbalance, with projections indicating a shortage of almost 15,000 student beds by 2028, raising rental costs. Rental yields for luxury city-centre apartments range from 6% to 6.6%, while rental yields reach 8.1% due to the city’s large population of students and graduates who decide to stay. The average property price is approximately £ 256,644.

Rents have increased by 55.4% over the last five years, while property prices have increased by 26%. Forecasts indicate that prices will rise by 4.5% to 7% annually between 2025 and 2026, and that growth will be consistent until 2030.

Liverpool

Several new projects have positioned Liverpool to attract Gulf investment in real estate. The Northern Waterfront redevelopment and the opening of Everton’s new stadium at Bramley-Moore Dock have created a new economic and residential hub, making the area more appealing to investors and tenants.

Furthermore, the £800 million expansion of the Knowledge Quarter will reach a significant milestone in 2026, fostering growth in the health and life sciences sectors and driving demand for modern apartments in the area.

The new Liverpool Baltic station, slated to open in 2027, marks another significant project. Local property values will likely increase even before construction finishes. The Baltic Triangle region produces returns of 6% to 6.5%, while yields for some student housing properties range from 8.5% to 10%, making Liverpool one of the top UK cities for rental yields.

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Leeds

Leeds is now one of the British cities drawing Gulf real estate investors. It has developed into a quickly expanding financial centre thanks to ongoing growth in the banking and fintech industries. The £100 million Leeds Bradford Airport development project, opening in 2026, boosts economic activity and increases the city’s attractiveness to investors, businesses, and international students.

Leeds also benefits from the presence of major financial institutions, such as the Bank of England and the UK Infrastructure Bank, which is driving up demand for modern city centre apartments. According to forecasts, house prices in the Yorkshire and Humber region could rise by 18% to 20% over the next five years, outpacing London’s projected growth rate. Meanwhile, rental yields in the city centre range between 5.9% and 6.3%.

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Nottingham

With more than 70,000 students enrolled in the University of Nottingham and Nottingham Trent University, Nottingham is using the steady expansion of its higher education sector to draw in Gulf investors.
One noteworthy project is the “Island” development project, which combines contemporary business facilities, life sciences labs, and student housing to create a steady demand for residential real estate.

In terms of the supply-demand gap for contemporary student housing, the city is similar to Manchester; rents for first-rate student housing increased by 5% to 7% during the previous academic year, and rental yields in the Beeston area and city centre range from 6.5% to 7.5%.

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Bradford

Bradford, an up-and-coming British city that is drawing more and more Gulf investors looking for high returns at reasonable prices, is an unexpected addition to this list. While rental yields can reach up to 12% in some areas, the average property price there is only £180,408.

The city has entered the real estate race thanks to several significant regeneration projects. These include the Southern Gateway project, which will generate 23,000 jobs and provide land for 5,000 new homes, and Bradford City Village, which features 1,000 new homes, three public parks, and contemporary commercial spaces.

The city’s designation as the “City of Culture” for 2025 is also noteworthy, which increases its attractiveness to tenants and investors. Between 2024 and 2025, real estate prices increased by 8.19%. In 2026, analysts expect them to grow at rates of 7% to 9%, with positive growth continuing until the end of the decade.

In conclusion, Gulf investors are a major force behind the UK real estate market; considering the previously mentioned numbers, it is impossible to ignore the important role the Gulf region plays in the expansion of British real estate. Investors should take advantage of the British government’s efforts to turn secondary cities into international centres, which present profitable prospects for those looking for high-yield properties at reasonable prices.

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