First-time buyers looking for the best return on their investment should head north to purchase a home, according to the Royal Bank of Scotland first-time buyer property index.

The index sets out to identify the best UK property hotspots where first-time buyers may achieve a good return on their investment in a short period.

The RBS study, conducted across Britain’s 2,800 postcode districts, uses property data analysis and external experts (including 300 chartered surveyors and local estate agents) to examine a wide range of factors affecting potential future house price growth, together with current desirability for first-time buyers.

The five most important factors, say the RBS are:

• House price to income ratio
• House price growth within an area over the last twelve months
• Regeneration schemes in progress
• Transport links
• Young population average

All of the factors, when weighted and combined, provide an overall scoring for each area, allowing them to be ranked.

Top hotspot

The top property hot spot for the coming year, according to the index, is Openshaw on the outskirts of Manchester. The report claimed the area was on the verge of an urban renewal, but currently had some of the lowest property prices in its index at an average of £52,690, well below the national average of £183,199.

At the same time it has benefited from a recent regeneration scheme and the building of a new hyper market, helping house prices to rise by 14 per cent during the past 12 months, double the national average of 7.3 per cent.

Predictably, the north features well in the index with Teeside in Middlesborough, Ardwick in Manchester, Falkirk in Scotland and Ferndale in Wales tipped for possible hotspots.

Also listed in the top 10 were:

• Kingston-upon-Hull
• Blaenrhondda in South Wales
• Stratford in London
• North central Stoke-on-Trent
• Leven in Scotland.