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26 January 2019, 10:07 | Updated: 26 January 2019, 10:10
The Bank of Scotland's 2019 Quality of Life Survey winner took the top prize due to its high employment levels, low crime rate, strong exam results, smaller primary class sizes and good health and happiness scores.
Shetland, which takes second place in the Scottish table, is the only other location north of the border to break into the UK top 50.
Ricky Diggins, network director for the Bank of Scotland, said: "Orcadians will be thrilled to learn that not only is their home the best place to live in Scotland, it's now taken the crown for the whole of the UK.
"With Shetland and Eilean Siar coming second and third in Scotland, it's a clean sweep of the podium places for these island communities.
"Their more remote locations may not appeal to everyone but with benefits including high employment, low crime rates, smaller class sizes and more affordable housing, people around the country will now be dreaming of a life spent on the isles."
The archipelago is also home to neolithic sites such as the Ring of Brodgar and Maeshowe.
At a UK level, Richmondshire in North Yorkshire took second place, followed by Rutland in the East Midlands, Hambleton in North Yorkshire and Eden in Cumbria in fifth place.