Manchester Property Investment : 9 Reasons To Invest in Manchester
Make a Manchester property investment and you’ll be capitalising on one of the UK’s most thriving and exciting cities. A diverse and iconic northern hub, Manchester offers residents a little bit of everything.
Regeneration and investment continue to make the city a popular and pleasant place to live. A strong economy and world-class universities see an influx of young professionals and students, spurring a healthy rental market.
Read on to discover more about investing in Manchester and the top reasons for owning a property in the city.
1. Manchester Economy- A Powerhouse
Manchester has an economy bigger than both Wales and Northern Ireland and is a key member of the Northern Powerhouse. This cluster of leading cities in the North of England together forms a super economy to rival London’s.
By 2026, Manchester’s GVA is expected to be £2 billion larger than in 2022. According to Ernst & Young, Manchester’s economy will see annual average growth of 2.5% between 2024 and 2026. This outpaces the national growth rate (2.1%) and puts the city third-fastest in terms of economic growth out of all UK towns and cities 2024 – 2026 (behind Reading, 2.7% and London, 2.6%).
The strength of the city’s professional, scientific and technical and financial sectors support Manchester’s positive economic outlook. Between 2024 – 2026, Manchester is due to record the fastest rate of employment growth of any UK city, with job numbers increasing 1.8% per year (the national average is 1.3%).
Talent-hungry companies are flocking to Manchester thanks to the stream of workers provided by its world-class universities. This is good news for property investors. Manchester’s increasing popularity amongst young professionals is spurring a healthy rental and buy-to-let market.
2. Manchester Businesses Create Endless Opportunities
Manchester is a city with innovation running through its veins. Among its accolades is its 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 making up its modern economy:
- Life sciences
- Advanced materials
- Creative, digital and tech sectors
80 out of the 100 FTSE 100 companies are located in Manchester, including Amazon, BBC and Kellogg‘s, helping to build and attract a growing talent pool in the city. Globally trading companies with a base in Manchester include PZ Cussons, Co-operative Group, Umbro and Peel Group.
Diverse and pioneering companies fuel job growth, new business opportunities and support start-ups 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 Hub
Manchester is a top Digital Tech City and has become a national and European leader in a number of innovative and emerging sectors.
Manchester has a £5 billion technology ecosystem and is home to 10,000 digital and tech businesses. The city is recognised as one of Europe’s largest creative, digital and technology clusters. The city’s tech industry is growing at six times the rate of the UK economy and employs 100,000 people.
A big factor in the city’s success is the establishment of MediaCity. This purpose-built digital hub has a broadcast and media heritage and is home to companies like the BBC, ITV and Mediacom. It is one of the largest media and creative hubs in Europe and home to a wide range of businesses, including TV studios, radio stations, production companies, and creative agencies.
MediaCityUK has helped to establish Greater Manchester as a major hub for the creative and digital industries. 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 £1 billion) like boohoo clothing, AO.com and data-integration company, Matillion.
The city’s tech and start-up scene do so well thanks to a sustainable flow of graduates from the city’s five universities. 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 capitalise on a steady and growing rental market for real estate in Manchester.
4. Manchester House Prices
Manchester property investment has caught the eye of investors in recent times. House prices in Manchester have soared by 330% over the past 20 years. The city experienced double-digit growth post-pandemic – the first of the UK’s big six cities to do so – with annual growth of 12.6% recorded in June 2021.
At the end of December 2022, prices for a new one-bed flat in Manchester averaged £213,000, with two-bed flats going for an average sale price of £300,000.
The rental outlook for UK cities remains strong as demand for housing continues to outstrip supply. According to JLL, annual house price growth for Manchester is expected to reach 5% in 2023. The 5-year house price forecast is particularly appealing to investors, with property prices expected to increase 19.3% from 2024.
According to money.co.uk, the average house price in Manchester is currently £234,841, while the average rental price is £850 per month.
5. Manchester Rental Growth
Manchester was the UK’s best-performing city for rental growth in 2022 and the city centre recorded a 22% increase in achieved rents in December. The average rent for a one-bed flat in the city centre was £1,172 per calendar month and £1,495 for a two-bed flat.
Q3 2022 statistics show that there are 26% fewer homes to rent compared to the pre-pandemic average. The supply-demand imbalance continues to make for a lively rental market. Due to restricted supply and an increase in demand for rental homes, in many instances, renters are bidding higher than the asking price when trying to secure their rental property.
Manchester is seeing even greater yields of 9.4% as rental values push ahead of house prices. The M14 postcode, for example, covering the areas of Platt Fields Park, Fallowfield, Moss Side and Rusholme, performs strongly, offering a yield of 9.5% in 2023.
Despite economic uncertainty including rising interest rates, the Manchester rental marketplace continues to offer exceptional returns for landlords. With plenty of investment opportunities, securing a buy-to-let investment property in Manchester is an appealing prospect. When it comes to buy-to-let investments within a top UK housing market, Manchester is one to watch.
6. Manchester Lifestyle: A Sought-After City
Manchester property investment is helped by the city being an attractive place to live and work. Also, Manchester holds the title of the UK’s most liveable city and is ranked 28th 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, 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.
7. A Strong Student Rental Market Accommodation
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 28th in the world (QS World University Rankings). The university is the UK’s largest single-site university campus, attracting high numbers of students from the UK and all corners of the globe. Manchester property investment in the student market can be lucrative indeed.
There are around 90,000 students across Greater Manchester’s five universities. With a strong growth in student numbers, the city adds 1,000 new bed spaces each year. However, in the past five years, for every new bed space added to the supply three more full-time students are added to the population, resulting in a continued student accommodation shortfall.
With demand for accommodation exceeding supply, landlords can expect high demand from students and young professionals. There is a good opportunity in the luxury and high-end student apartment market, in particular. Many students, especially those from overseas, are searching for accommodation of a higher standard.
If you’re looking for long-term high-net returns, investing in student property in Manchester is something worth exploring.
8. Manchester as 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.
Manchester to London is around 2 hours by train, making it easy to get into the capital. The Great North Rail Project will allow more than 40,000 more passengers to travel throughout Northern cities on a daily basis and 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 200 destinations, each year the airport handles more than 19 million passengers.
9. Manchester Regeneration Transforming the City
Manchester is one of the fastest-growing cities in Europe being transformed by skyscrapers, residential buildings and office space.
In September 2020, Manchester City Council announced over £1 billion in new investment schemes. These include 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 neighbourhood.
Which Areas to Invest in in Manchester?
There are a number of areas across the city with attractive property prices and strong rents. Here are some areas to take a closer look when purchasing an investment property Manchester.
Manchester City Centre
Manchester City Council states that over 5,000 people move into the city centre each year. The current metro area population of Manchester in 2023 is 2,791,000.
Some of the best property investments in Manchester can be found in the city centre. As the city’s population continues to grow there is a lack of housing stock to meet demand, particularly high-end flats. Currently there are a number of new build apartments Manchester city centre springing up. An ideal place to invest, house prices and yields of Manchester city centre property are rising more rapidly than other up-and-coming areas of the city.
Properties in Manchester City Centre had an overall average price of £254,877 over the last year.
With the heart of the city centre a short walk away, property investment Manchester makes Salford an increasingly popular area for investors. Home of the University of Salford, the area is popular with students. This makes buy-to-let property in Manchester in the student accommodation category an attractive option. With the regeneration of Salford Quays and MediaCityUK in close proximity, young professionals, too, are flocking to the area.
Average property rents in Salford are currently £1,414 per calendar month and flats in Salford had an average selling price of £213,050.
South of the city and around 7 miles from the centre, Stockport is popular with families and commuters travelling 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.
Properties in Stockport had an overall average price of £281,379 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, making it a popular area for investments in Manchester.
The average asking rent for a 2-bedroom flat in Moss Side is £1,388.01 per calendar month. Properties in Moss Side had an overall average price of £192,093 over the last year. Which makes it one of the best areas in Manchester to buy a house.
Is Buying Property in Manchester a Good Investment?
Manchester is tipped as a top property for investment in 2023. House prices are expected to increase by 5% in 2023. The north-West region as a whole is the UK’s second-fastest growing property market, making Manchester property investment a good option.
Regeneration around the city is changing the face of its housing market. The city is becoming an increasingly popular place to live and work. Investors are getting higher returns than cities like London, and with a buoyant tenant market fueled by students and young professionals, Manchester remains a top property investment destination.
Manchester has one of the largest rental demands by volume outside of London. Rental prices in Manchester are set to grow by nearly 16.5% over the next few years which is more than any other city in the UK. When all of these facts are considered, buying property in Manchester can be a good investment.
What is the Average Rental Yield in Manchester?
Manchester offers plenty of high-yielding property. Average yields in Manchester are currently 6% – 7%. Average rental prices in Manchester vary depending on room number. For HMOs, double rooms currently rent for £532 per calendar month on average. Whereas single rooms rent for £436 per calendar month. A one-bedroom flat in the city centre can command rent of £1,172 per calendar month. Manchester rents are currently around £100 higher than cities like Birmingham due to a supply-demand imbalance.
Manchester property investment is being driven by a fast-growing economy, innovative businesses and a thriving student market. With one of the UK’s largest growing rental markets, investing in Manchester is an attractive prospect for investors. If you are looking to invest in a property in Manchester, contact our team today.