The UK is home to a London-centric investment landscape, with the capital receiving nearly twice as much investment as other cities, leaving other regions of England relatively underserved. With this in mind, Oxford Capital sought to uncover the most attractive UK cities for investment outside of London.
To do so, the investment experts created a points-based index system which considered in each city: the percentage of UK inward FDI earnings, births of new enterprises, 5-year business survival rates, RQF4+ qualifications, degree level percentages, ultrafast broadband availability, the investment proportion of equity deals, the VC investment by notable UK startup ecosystems and the cost of SME R&D scheme claims.
The results: The most attractive UK investment areas outside of London
| Rank | City | Births of new enterprises (2021) | Business 5-year survival rates (2017-2022) | Percentage with RQF4+ qualifications | Percentage of UK inward FDI earnings (2021) | Investment proportion of equity deals | Venture capital investment in 2023 | Investment opportunity score /100 |
| 1. | Cambridge | 3,150 | 46.2% | 63.7% | 3.2% | 9% | £800,390,000 | 85.0 |
| 2. | Oxford | 3,330 | 45.6% | 74.3% | 4.8% | 14% | £629,106,540 | 79.2 |
| 3. | Bristol | 2,440 | 42.8% | 56.8% | 4% | 5% | £349,770,430 | 62.5 |
| 4. | Brighton | 2,360 | 41.8% | 56.5% | 3.4% | 11% | £19,209,360 | 60.0 |
| 5. | Manchester | 4,245 | 25.9% | 60.3% | 1.4% | 6% | £189,692,430 | 50.0 |
| 6. | Edinburgh | 2,220 | 41.6% | 69.9% | 0.7% | 8% | £108,052,650 | 47.5 |
| 7. | Glasgow | 2,960 | 37.7% | 56.9% | 1.6% | 8% | £179,287,360 | 46.7 |
| 8. | Birmingham | 6,855 | 32.1% | 44.4% | 2.9% | 3% | £514,650,770 | 45.8 |
| 9. | Leeds | 4,105 | 42.9% | 53.9% | 0.3% | 3% | £70,434,320 | 41.7 |
| 10. | Cardiff | 2,355 | 40.3% | 50.7% | 2.4% | 3% | £100,048,750 | 40.8 |
The full dataset, including all metrics analysed, is available here.
Oxford Capital can reveal that Cambridge is the most attractive city for investment outside of London, with an investment opportunity score of 85/100. The city of Cambridge has one of the highest 5-year business survival rates (46.2%), which is promising for investors as it indicates a robust and resilient business environment conducive to long-term growth and stability. As well as this, six in 10 in the city (63.47%) hold qualifications of RQF4 or higher, demonstrating a highly educated workforce capable of driving innovation and entrepreneurship. In terms of VC investment, Cambridge has already proven itself as a desirable choice for investors, attracting £800.3M in funding in 2023.
The city of Oxford ranks second, with an investment opportunity score of 79.2/100. Following in its Oxbridge counterparts footsteps, £629.1M of VC funding was invested into the city in 2023, underscoring investors’ growing confidence in the city’s capacity for sustained growth. As well as this, Oxford accounted for 14% of the total UK equity deals made in 2023, the highest proportion of all cities analysed. Oxford’s allure extends further with FDI investment, surpassing that of any other UK city outside of London at 4.8%. Notably, the city has the most highly educated workforce, with nearly three-quarters (74.3%) holding qualifications of RQF4+.
Bristol takes third place with an investment opportunity score of 62.5/100. With 2,440 new enterprise births in 2021 and a 5-year business survival rate of 42.8%, the city stands out as the South West’s most promising tech hub. VC investment in the city (£349,770,430) nearly doubles that of Manchester (£189,692,430), highlighting investors’ recognition of both the growth potential and the calibre of burgeoning start-ups in the region. Alongside venture capital funding, the city also attracts foreign direct investment (FDI) at a rate of 4% in 2021.
Ranking fourth is Brighton, with an investment opportunity score of 60/100. The South East enjoyed the second highest number of FDI projects in 2021-22, with top-scoring cities like Brighton evidencing how interested foreign businesses are in the region. Brighton has a great talent pool and produces highly skilled graduates every year, with 56.5% of residents being educated to a level of RQF4 or higher. Despite this, Brighton had one of the lowest levels of VC investment in 2023 (£19,209,360), highlighting the untapped entrepreneurial landscape for investors to consider and benefit from.
Mark Bower-Easton, Head of Distribution at Oxford Capital, has shared his expertise on VC investment in the UK:
“The London-centric investment landscape of the UK is undergoing a transformative shift as investors increasingly begin to recognize the untapped potential of other cities. It comes as no surprise that Cambridge leads the ranking, boasting a robust tech ecosystem with exponential growth potential, particularly within the biotech and AI sectors — an enticing prospect for investors.
Similarly, Oxford emerges as a pivotal player in the investment landscape, drawing attention from investors seeking innovation and promising returns. Thanks to its world leading university, which has evolved from an institution more associated with the classics and PPE to a modern, research-driven industry, the city of Oxford has a highly skilled talent pool where some of the greatest young minds are turning their ideas into reality.
Turning these ideas into viable business opportunities requires investment. By diversifying investment portfolios to include these regional powerhouses, investors can not only mitigate risks associated with overreliance on London-centric investments but also capitalise on the unique strengths and opportunities presented by these vibrant cities, ultimately contributing to a more resilient and diversified economy across the UK.”