Manchester House Prices: Analysis of Trends and Predictions
We take a look at Manchester house prices in 2023. As well as the trends impacting the market and what investors can expect in the coming years. And why investing in properties in Manchester could make a great return on investment.
In the past two decades, Manchester’s property market has witnessed exceptional growth, surpassing other cities to become one of the UK’s hottest property investment destinations.
With ongoing regeneration, a growing population and a buoyant job market, the city’s attraction knows no bounds and property prices continue to rise across the board.
The Current State of the Manchester Housing Market
Manchester continually ranks top amongst UK cities for property investment and is the destination that landlords are most likely to invest in.
How much does a house cost in Manchester, UK? Over the last year, average house prices in Manchester were £284,276. Overall, sold prices were 2% up on the previous year and 11% up on the 2020 peak of £255,800.
In recent years, Manchester proved popular with first-time buyers. Although applications for the Government Help-to-Buy scheme ended in October 2022, from April 2022 – March 2023, the average price of a new build property was £309,000. This is a price increase of £29.500 (11%) over the last twelve months.
How do Manchester House Prices Compare to Other UK Cities?
Housing in Manchester is one of the most affordable when you compare it to other cities in the UK. While average prices in Manchester sit at £231,000, average house prices in London are £723,707 and Bristol £400,520.
Why is Manchester a Property Investment Hotspot?
With record property price growth in recent years, a few key factors are driving Manchester’s appeal:
Manchester’s Growing Population
The growth of Manchester house prices is being driven in part by Manchester’s growing population. As the population rises, there is an increase in the demand for properties alongside increasing property prices due to insufficient supply.
As of 2021, Manchester was the most densely populated of the North West’s 39 local authority areas. Today, there are about 2,791,005 people living in Manchester, and it is one of the most visited cities in the country London and Edinburgh.
With a population close to three million, there’s plenty of potential for rental investments. Investors that can purchase property below market value will be able to generate impressive yields due to the consistently high costs of rent.
In addition, the city has one of the UK’s most thriving student populations, also spurring demand for housing as well as helping to drive the area’s booming economy.
Interested in investing in student accommodation? Check out our guide: Best Student Accommodation Areas in the UK
Manchester Regeneration and Incoming Investment
In the last two decades, Manchester has undergone nothing short of an urban renaissance. Regeneration and investment is a major contributor to its growth, changing the landscape of the city and increasing its appeal and increasing Manchester house prices.
Regeneration projects boost the quality of living, drawing businesses to the area which make the city more appealing and increase its livability. Some examples transforming Manchester include:
Media City UK
MediaCityUK is a 200-acre mixed-use property development on the banks of the Canal in Salford, home to companies like the BBC, ITV, the University of Salford and around 40 service companies.
NOMA Manchester is another mixed-use redevelopment scheme. The £800 million and 20-acre investment is the largest development project in North West England and plays a major role in attracting more companies to invest in Manchester.
Spinningfields is the city’s financial centre and a shopping and entertainment destination with bars, restaurants, Manchester Opera House and the People’s History Museum.
As well as major businesses, Manchester ranks in the top 10 global destinations for startups.
With the cost of living around 31% cheaper than London, recent years have seen many businesses relocate north. In addition, the pandemic spurred a small exodus from London as people sought out more space and quality living for their money.
Manchester Housing Shortfall
2021 saw the completion of thousands of apartments in high demand areas. Even with the completion of these apartments, there is still not enough to meet the city’s centre population growth.
Manchester city council estimates that the city centre population will surpass 100,000 by 2025, with 5,000 more people a year moving into the centre of the city. It’s expected that demand will further push up property prices and increase capital gains, especially for those buying off-plan real estate in Manchester (read more in our guide to off-plan property investment).
Manchester Property Market Predictions 2023 and Beyond
In the last three years there has been consistently high demand for homes in Manchester, with prices up 21.8% since the end of 2019.
In 2023, housing stock should remain low, which means house prices are likely to stay steady and even exceed other cities in the UK. However, like the rest of the UK, the housing market in Manchester is unlikely to see the same growth as in 2021 and 2022, particularly with inflation and interest rates on the rise.
At the end of 2022, according to JLL, flat prices in Manchester were as follows: prices for a new one bed flat in the city averaged £213,000, two bed flats at £300,000 and £367,500 for a three bed flat. Annual house price growth should rise to 5% in 2023. JLL predicts an impressive five-year house price growth forecast of 19.3% through 2027.
Overall in 2023, house prices are unlikely to see the same accelerated pace as in 2021 and 2022, but continued property price growth over the year looks likely.
Manchester Rental Market Predictions
While property prices in Manchester in 2022 continued to rise, across the UK demand for rental properties greatly outstripped supply, leading to intense competition among tenants.
Manchester was the UK’s best-performing rental market in 2022, recording 20% growth in rents in the city centre. In the Manchester city centre property market, average rents are currently around £1,172 for a one-bed flat, £1,495 for a two bed flat and £2,100 for a three bed flat.
With a restricted rental supply, February 2023 saw the lowest number of available apartments in any February of the last four years, with only 528 available apartments. This figure is down 76% from February 2021’s high of 2,216 apartments.
As well as a lack of supply, quality build stock has helped push the average price of rents up in Manchester. High specification three bed homes recorded the highest annual growth at 33%, followed by two beds at 22%, making Manchester rent growth appealing for landlords.
Above Average Rental Yields
Average rental yields across the UK are around 4.7%, and between 5-6% is considered a strong performance. Rental yields in Manchester were at a rate of 5.1% on average, and the property market in the city continues to dominate the market thanks to strong demand and a growing population.
The Highest Rental Forecast Growth in the UK
Between 2023 – 2027, JLL predicts five year rental forecast growth of 21.6% in Manchester, the strongest in the UK, closely followed by Birmingham at 19.3%.
With a growing population and regeneration improving the area’s livability, there’s strong demand for rental properties and with the right property in the right area, landlords can make good returns.
What is the Property Market Forecast for Manchester in 2023?
Manchester house price trends have shown consistently high demand for homes in Manchester, and the city is one of the UK’s best performing property markets. With returning students and young professionals, demand is outstripping supply. The five-year sales forecasts puts house prices growth in Manchester at 19.3% through to 2027.
Are House Prices Dropping in Manchester?
If you’re thinking of buying a house in Manchester, in 2023, house prices should continue to increase. Albeit at a slower rate than in 2021 and 2022. If demand for homes continues to surpass the number of those coming onto the market, it’s likely that property prices will continue to rise. According to the latest property news Manchester, JLL predicts house prices to increase by over 5% in 2023 and other predictions put that growth up to 8%.
Is it Worth Buying Property in Manchester?
Manchester is a vibrant city with a strong economy and a rich cultural scene. With renowned universities, and well-known for its music, sports and entertainment industries, in recent years investors have seen the potential that the city offers.
For investors looking for strong rental yields and capital gains growth, Manchester is certainly one of the UK’s most exciting property markets.
What is the Property Prediction for Manchester?
House prices should still rise in the centre of many of the UK’s largest cities in 2023. Manchester should be the strongest market in terms of price growth and over the next 5 years property prices could grow by as much as 19.3%
What are the Lowest Manchester House Prices by Area?
When looking at house prices in Manchester, Wigan is the most affordable borough of Greater Manchester with average property prices of £167,730. Rochdale comes next with an average property price of £190,703.
What are the Best Areas to Invest in Manchester?
In Salford the average price of a home currently stands at £253,904 Manchester Waters is one of the remaining large-scale regenerations being undertaken in the area and offers walking distance to the centre.
If you’re looking to buy a Manchester property, as well as a range of one and two-bedroom flats, another major appeal of Salford is its proximity to MediaCityUK. Rental yields should rise in the area due to the quality of housing stock and a growing student and young professional population, making properties in this area a good investment.
House prices in Oldham were priced at £190,949 on average over the last year.
Manchester’s Oldham area saw the highest annual house price growth out of Manchester’s 10 boroughs. Unrivalled countryside, small villages and more space for your money certainly add to Oldham’s appeal – almost 25% of the borough lies within the Peak District National Park.
Trafford is currently the borough with the highest house prices in Greater Manchester. Average prices in the last year were £338,640. A popular area for families, Trafford borders Cheshire but offers an easy commute to Manchester city centre. Trafford is also home to some of the country’s best schools. Because of that, good accommodation in sought-after school catchment areas can go for a pretty penny.
The Manchester property market forecast delivers strong predicted growth and now is a great time to buy property and invest in Manchester. Manchester house prices in 2023 are expected to rise. And with high-quality residential property on offer and more developments in the works, landlords can find highly desirable properties to spur tenant demand. As well as gain great yields and capital growth. If you’re interested in property in Manchester, get in touch with our experts today.