Manchester Property Investment : 9 Reasons To Invest in Manchester
Make a Manchester Property Investment and you’ll be capitalizing on one of the UK’s most thriving and exciting cities. This diverse and iconic northern hub offers residents a little bit of everything, and regeneration and investment continue to make the city a popular and pleasant place to live.
A strong economy and world-class universities have led to an influx of young professionals and students spurring a healthy rental market. Manchester is forecast to see both the highest sales price and rental growth of any UK city over the next five years, meaning purchasing a buy-to-let property in Manchester could be a game-changer for any investor’s portfolio.
Read on to discover our top reasons for owning a property in Manchester and the areas of the city you should consider.
Buy Property in Manchester – High Performing City
While often considered England’s second city, Manchester is also the sixth-largest in the country. Manchester City Council estimates that the residential population of the city reached 575, 400 in 2019.
Economically, Manchester stands among the highest performing cities in Europe. With a steadily increasing population mostly comprising young professionals and students, extensive infrastructure development, construction, and regeneration, Manchester is hugely attractive for property investors of all kinds.
EY’s annual Economic Forecast predicts economic growth for Manchester of 1.2% by 2021, one of the highest in the UK. Manchester City Council measured the overall Gross Value Added (GVA) increase of the city between 2016 and 2017 as 4.3%, compared with 3.6% for the whole country. And in March 2019 the UK Business Count 2019 compiled by the Office of National Statistics (ONS) recorded 22,630 businesses in the city.
Over recent years, there has been an influx of multinational enterprises to Manchester, which further boosts the need for residential property in the city. As part of a major redevelopment centering on the Soapworks building in Salford in 2018, TalkTalk relocated its HQ. This redevelopment of the River Irwell area also encompasses the nearby flagship Bupa building. A few years prior, the BBC moved many of its TV, radio, and sports operations to Media City in Manchester, and ITV moved in the opposite.
1. Make a Manchester Property Investment: An Economic Powerhouse
A key member of the Northern Powerhouse – a cluster of leading cities in the north of England that together form a super economy to rival that of London – Manchester has an economy bigger than Wales and Northern Island and a population of more than 2.7 million people.
The 10 boroughs of Greater Manchester have a gross value added (GVA) of £62.8 billion, and as one of Europe’s fastest-growing cities, Manchester has an outstanding global reputation as a competitive place to do business.
Talent-hungry companies are flocking to Manchester thanks to the stream of workers provided by its world-class universities and the young professionals that come to work and live in the city. Manchester’s increasing popularity amongst young people is spurring the growth of its rental and buy-to-let market.
In the coming years, the levels of job creation in Manchester could outpace that of cities such as Berlin, Tokyo and Paris, and a further influx of people will ensure property prices and monthly rental rates will continue to rise.
2. The City’s Vibrant Businesses Creates Endless Opportunities
Manchester is a city with innovation running through its veins. With a long track record of pushing the boundaries, amongst its accolades is it’s role in the Industrial Revolution, the realisation of economic theory and the birthplace of Vitro Fertilisation (IVF).
Today Manchester’s strengths are diverse and numerous with well-established and globally renowned sectors including life sciences, cyber-security, FinTech, advanced materials, healthcare, and manufacturing, as well as creative, digital and tech sectors set to shape the city’s future. With world-class infrastructure to support businesses in all sectors, over 2000 foreign-owned businesses have a base in Manchester, including behemoths like Google, Cisco and IBM.
Diverse and pioneering companies fuel job growth, new business opportunities and support startup and large and small businesses, offering plenty of opportunities for young professionals. As a result, Manchester is an attractive city for property investors, particularly for those targeting the young professional rental demographic.
3. A Start-Up, Digital and Creative Scene to Rival London
Manchester is a top Digital Tech City and has become a national and European leader in a number of innovative and emerging sectors. Creativity and technology are jointly driving the next wave of innovation and the city is recognized as one of Europe’s largest creative, digital and technology clusters with a fast-growing £5 billion digital ecosystem.
A big factor in the city’s success is the establishment of MediaCityUK. A regeneration project transforming the former Manchester docks in Salford Quays, this purpose-built digital hub has a broadcast and media heritage and is home to companies like the BBC, ITV and Mediacom. The city’s creative, digital and tech ecosystem houses more than 10,000 businesses at all stages, from start-ups to SMEs to globally renowned brands.
As well as a leader in advertising, marketing, animation, gaming and augmented and virtual reality, Manchester has given birth to some of the fastest-growing tech companies in the UK, including unicorns (start-ups with a value of £1bn) like boohoo clothing and shopping firm AO.com.
The city’s tech and start-up scene do so well thanks to a sustainable flow of graduates from the city’s five universities, many of whom pursue creative, tech and digital degrees or apprentice-led courses. As a result, businesses have a wide range of talent with the right skills to choose from.
A strong creative, media, tech and start-up ecosystem, and the continued growth of MediaCityUK is driving huge demand for properties in the Salford Quays area and its surrounds. As more graduates and young professionals flock to this area, property investors can capitalize on a steady and growing rental market.
4. Manchester is Forecast to See the Highest House Sales Prices in the UK
In the last decade, Manchester’s property market has been particularly impressive. While 2020 was an uncertain time for the UK market as a whole, Manchester property prices remained resilient with trends continuing their upwards trajectory.
Particularly of note to investors will be the fact that Manchester is forecast to see both the highest sales price and rental growth of any UK city over the next five years. Over a five-year period up to 2024, the average value of residential Manchester property is set to grow by 17.1%.
In 2019, property values in Manchester had one of the biggest year-on-year house price growth at 3.4% annually, much higher than the national 2.1% average. As it stands, property value is growing at 4 times that of London, and predictions anticipate this gap to widen in the coming years.
5. The Highest Rental Growth of Any UK City
Manchester is poised to see the highest rental growth of any UK city over the next five years. Many properties in Manchester offer highly appealing rental yields for investors, which remain some of the highest in the UK. The M14 postcode, for example, covering the areas of Platt Fields Park, Fallowfield, Moss Side and Rusholme offers the top 5 best yields in the country at 10.5%.
Rents in Manchester are expected to increase over the next few years at 16.5% reflecting heightened demand and better quality stock (the UK average is 14.8%).
Despite the lucrative rental yields, house prices remain affordable, particularly compared to other cities in the northwest. The average property prices in Manchester stood at £202,905 in December 2020, a rise of 6.14% compared to the previous 12 months. In terms of property types, flats in Manchester sold for an average of £185,742 and terraced houses for £154,469.
With plenty of investment opportunities, securing a buy-to-let investment property in Manchester is an appealing prospect. Below-average house prices and the fastest-growing rental yields and property prices of any UK city put Manchester in the spotlight for property investments. When it comes to buy-to-let investments within a top UK housing market, Manchester is one to watch.
6. Manchester is a Sought-After Lifestyle City
Manchester holds the title as the UK’s most liveable city and ranked 38th in the world.
The city and region offer a quality of life unlike any other in the UK, attracting young professionals, families as well as tourists from around the world.
Whatever the interest, Manchester has something to offer and is well-known for its music and performing arts scene, gastronomy and nightlife and sport and leisure offerings. As well as all the conveniences of a major city, there’s plenty of nature right on the doorstep with The Lake District, Pennines and Peak District just a stone’s throw away. In addition, in 2019 Manchester overtook Edinburgh as the most popular tourist destination outside of London, and the city is one of the most visited in the UK.
7. A Thriving Student Scene Supports a Healthy Rental Market
Manchester is the home to five of the UK’s leading universities known for their excellence in teaching and research and strong industry collaboration. The University of Manchester ranks in the world’s top 30 (QS World University Rankings) and is the UK’s largest single-site university campus, attracting high numbers of students from the UK and all corners of the globe. The current number of student bed spaces sits at 24,000 but there remains constant demand for new student developments and living spaces that drive the city’s buy-to-let market.
Investors will do well to consider investing in the student property market and with demand for accommodation exceeding supply, landlords can expect high demand from students and young professionals. There is good opportunity in the luxury and high-end student apartment market in particular, as many students, particularly those from overseas, are searching for the accommodation of a higher standard. If you’re looking for long-term high returns, investing in student property in Manchester is something worth exploring.
8. Located in the Heart of the North
Known as the “gateway to the north of England”, Manchester’s convenient location and excellent infrastructure make it a useful and accessible base to travel farther afield.
The city’s urban light rail, Manchester Metrolink, transported 41.2 million people around the city in 2019, making inter city-travel fast and convenient. Manchester to London is around 2 hours by train, making it easy to get into the capital. By 2022 the Great North Rail Project will allow more than 40,000 more passengers to travel throughout Northern cities on a daily basis and is expected to increase visits to Manchester from both tourists and commuters.
On the fringe of the city is Manchester Airport, the largest UK airport outside of London. Flying to almost every continent and serving more than 220 destinations, each year the airport handles more than 22 million passengers.
9. Regeneration and Investment in Manchester Property Continue to Transform the City
Manchester is one of the fastest-growing cities in Europe. The city’s skyline is being transformed by six skyscrapers currently under construction, 11,135 residential units being built, and more than 1.5 million square feet of office space completed in 2019.
Despite 2020 being an uncertain year, continuing property investment companies Manchester shows great confidence. In September 2020 Manchester City Council announced over £1bn worth of new investment schemes, including a £350 million Manchester arena, a £185 million investment to build 3 towers with 634 new homes as part of the Northern Gateway scheme, and a 2,000-room co-living scheme on First Street.
Continual investment in and regeneration of the city has much to do with Manchester’s prominence as a Northern Powerhouse City, further improvement plans are in place too, including the regeneration of the St Johns neighborhood.
Which Are the Best Areas Up and Coming Areas in Manchester?
Manchester City Centre
Manchester City Council states that over 5,000 people move into the city center each year, and the population is due to reach over 100,000 by 2025. As the city’s population continues to grow there is currently a lack of housing stock to meet demand, particularly high-end flats. An ideal place to invest, as well as plenty of regeneration and investment projects making city center living an attractive option, house prices, and yields, are rising more rapidly than other areas of the city.
With the heart of the city center a short walk away, Salford is becoming an increasingly popular area for property investors. Home of the University of Salford, the area is popular with students, making buy-to-let student accommodation an attractive option. With the regeneration of Salford Quays and MediaCityUK in close proximity, young professionals, too are flocking to the area.
In 2019 flats in Salford sold for an average of £187,334.
South of the city and around 7 miles from the center, Stockport is popular with families and commuters traveling into the city for work thanks to efficient transport connections.
A highly sought-after residential area, there is strong demand for property and rental accommodation in Stockport.
Average property prices sit at around £235,103 over the last year.
The inner-city area of Moss Side is a popular area with students thanks to its proximity to Manchester and Manchester Metropolitan universities. While mainly Victorian terraces, new builds have been introduced in recent years along with the regeneration and investment in the area.
Properties in Moss Side had an overall average price of £145,257 over the last year.
Manchester is a UK city with some of the most exciting property prospects. Set to experience the fastest growth in house prices and rental yields of any city in the UK in the next five years, now is an ideal time to secure a buy-to-let investment. If you are looking to invest in a property in Manchester, contact our team today.