All About the Z-Score

Whether you’re a developer or an investor, if you’re contemplating an expansion into a new market, the Z-score analysis is our favourite model – and one that sets Cortland Consult apart.

Inspired by the refined data analytics frameworks that have under-pinned high-level investment strategies in the US multifamily market for more than a decade, we’ve created an original model that ranks potential locations for investment – all customised to a client’s investment strategy.

The Maths Definition

At its basic function, a Z-score describes the position of a raw score in terms of its distance from the mean when measured in standard deviation units. The Z-score is positive if the value lies above the mean and negative if it lies below the mean. But that’s the boring bit – so here’s how we use it.

How We Use It

We take these calculations and rank locations in a consideration set based on a range of socio-economic criteria and BTR fundamentals to understand how they compare and to assess BTR viability. There are currently 65 locations across the UK included in the Z-Score and 144 postcodes, excluding the London Boroughs. The primary indicators we focus on include the following:

  • Population
  • 20-39 year olds population (%)
  • GDP (Per Capita)
  • Forecast Employment Growth
  • Number of People Privately Renting as a Percentage of Population
  • Forecast Rental Supply Growth
  • Current Effective Rent Growth
  • Forecast Effective Rent Growth
  • Total Number of Households
  • Number of People Privately Renting
  • Number of Private Rented Households
  • BTR Completions
  • BTR Pipeline
  • Average Rental Yield
  • Travel to Work Data - Sustainable Methods of Transport
  • Employment
  • Full-time Student
  • Number of Professionals - Higher earners
  • Age 20-25
  • Age 26-30
  • Age 31-35
  • Age 36-40
  • 1 Person Households
  • Population Growth
  • Experian Mosaic UK 7 'Rental Hub'


The Dashboard

We break down the geographies by postcode district and can currently provide this analysis for core cities, London boroughs, and commuter towns. We then provide this analysis using a data visualisation platform that creates an interactive dashboard for our clients.

Equipped with this level of detail on local markets and socio-economic trends, our clients can be confident in their decision-making and their investment strategy vision.

Interested in learning more or discovering how our Z-score model can help you pinpoint your next development market? We’d love to chat!

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