Forget London or Birmingham – a new report has named Edinburgh as the UK's most attractive city for inward investment.

Design and consultancy firm Arcadis found the Scottish capital's strong economic performance and high proportion of skilled and educated workers were among the appealing factors for potential investors.

London came in at 7th in the study, behind cities such as Liverpool (4th) and Coventry (5th), highlighting what the firm described as the challenges associated with sustaining the growth of some of the UK's most established economic centres.

The study – entitled Investing in Britain: Cities Built for the Future – ranks 24 UK cities based on their performance against six criteria deemed crucial for future inward investment and growth: business environment, workforce and skills, infrastructure performance, housing, place and 'city brand'.

According to the report, Edinburgh currently tops its rankings as an established economic centre, but this means it requires high levels of investment in things like housing and infrastructure to accommodate continuing growth.

Meanwhile, the study found the UK's largest cities, including London, Manchester and Birmingham, all face particular challenges to sustain their long-term attraction as magnets for investment.

Measures such as having more affordable housing and reducing congestion were recommended as ways of boosting investment in London, while Birmingham and Manchester are urged to boost skills levels to grow their attractiveness to investors.

Peter Hogg, UK cities director at Arcadis, said: 'All cities have strengths and weaknesses, and no area is fundamentally 'un-investable'.

'The important thing is to recognise which levers need to be pulled – whether that's more affordable housing, more efficient transport or better digital connectivity – to ensure a city attracts the type of investment it needs. Every region needs to look at what it has, and how it can make the most of it.

'Most importantly though, the governance of a city needs to be structured in a way that makes investment easier and more welcome. From the agglomeration of industries and knowledge, facilitated by strong transport links, to identifying opportunities to create growth corridors, such as that proposed for Oxford and Cambridge, we need to see a more joined-up approach between regions.

'This will ensure that investment opportunities are focused on the right locations, helping to accelerate growth potential and ultimately realise new sources of competitive advantage.'