Property Investment in Manchester

When it comes to buy-to-let property investment, Manchester is undoubtedly one of the UK’s most popular and best-known locations. 

To explain why we have produced a downloadable guide that considers factors including:

  • Manchester’s economy
  • Inward investment in Manchester
  • Major developments in Manchester
  • Business growth
  • Manchester’s principal growth sectors
  • Manchester’s tourism market
  • Manchester’s sporting, social and cultural scene
  • Manchester’s housing market
  • Buy-to-let investment in Manchester
  • The student property market & PBSAs
  • Predictions for the buy-to-let market in Manchester for 2020 

Why Invest in Manchester? 

As a property investment destination, Manchester is an excellent all-rounder, strong on all the key measures that landlords typically value. 

  • A good record of capital growth
  • Rising rental values
  • Strong yields
  • A fast-growing economy worth nearly £63 billion per annum
  • Massive ongoing job creation
  • Inward migration of thousands of new workers
  • A rising population, forecast to grow by 100,000 by 2025
  • Rising standards of living
  • A thriving university sector 

For all these reasons and more, Manchester is attracting vast sums of inward investment, from the UK public and private sectors and, significantly, from overseas. 

To maintain the momentum, local planners have given the green light to major new infrastructure improvements, commercial developments and new enterprise zones, together with a substantial expansion to Manchester Airport’s Terminal 2. 

Inward Investment in Manchester

Inward investment is driving new construction, business growth and job creation. Well-known employers such as Amazon and Jaguar Land Rover have invested in the city recently, creating new jobs and encouraging many more in their supply chains.

Construction activity in Manchester has been progressing at ten times the UK average rate and it is giving rise to some impressive new projects. Examples include: 

  • ID Manchester – a £2 billion innovation district, created by the University of Manchester;
  • The Mayfield regeneration project, a £1.4 billion development that is creating new office, retail and leisure space;
  • The St John’s Project - a £1.35 billion construction scheme that will create new homes, office space, leisure facilities and a new arts and culture venue;
  • Trinity Islands – a £1.3 billion residential development on Deansgate;
  • Manchester airport T2 – a £1 billion expansion programme.

The consequences of all this urban regeneration should include more jobs, improved living conditions and, in all likelihood, steadily rising property values.

Business Growth in Manchester

It should come as no surprise that in an environment such as this, Manchester’s business population is thriving. Since 2014, the number of business operating in Manchester has risen from 15,000 to over 22,000, and this has helped make the city one of Europe’s top 15 for job creation.

 The sectors currently showing the fastest growth include: 

  • Business, finance and professional services
  • Construction and architecture
  • Creative industries
  • Advanced manufacturing
  • Life sciences and healthcare
  • Tourism

Tourism in Manchester is worth approximately £4.5 billion every year, and it has been growing at a rate of roughly 10% per annum. 

In 2019, Manchester welcomed 4.8 million staying guests and 59 million day-visitors, but the city now seeks to improve upon this in 2020 and beyond. Its targets include:

  • Increasing the value of the business conference market by 40%, supporting 14,000 new jobs
  • Increasing domestic visitor spending by £27 million
  • Increasing overseas visitor spending by £35 million

Manchester is undeniably one of Britain’s most popular tourist destinations and rising visitor numbers augur well for landlords with an interest in profitable rental options, such as short-stay accommodation and serviced apartments.

Manchester’s Housing Market

On the strength of all these credentials, many people regard property investment in Manchester as a logical and low-risk choice. This is borne out by recent housing market figures.

  • Average house price growth: 4.7% (Hometrack, November 2019)
  • Rental yields: between 4.5% and 7.6% according to postcode
  • Average yield: approx. 6%

In Hometrack’s UK Cities House Price Index, Manchester ranked second overall for price growth, surpassed only by Edinburgh, which achieved annual gains of 5.4%. 

According to some reports, the city-wide average for yield is circa 6%, but investors should look out for off-plan developments where rental assurances of 8% and more may be available. 

Student Property Investment in Manchester

Manchester’s university student population – some 100,000 strong – is one of the biggest in Europe, so its importance to landlords shouldn’t be underestimated.

Universities:

  • The University of Manchester
  • Manchester Metropolitan University
  • The University of Salford
  • University Academy 92
  • The University of Bolton

Taking a mix of traditional student rentals and purpose-built student accommodation, yields in Manchester typically vary between 6.5% and 8%.

Manchester Property Market Predictions for 2020

Many large employers, developers and international investors are committing billions to new premises and developments. With business numbers and employment rising steadily, all the signs suggest that Manchester will remain a property investment hotspot for many years to come. 

Industry predictions:

  • UK average price growth during 2020: 2% (Rightmove)
  • Average price growth during 2020 (North West England): 2% to 4% (Rightmove)
  • Average price growth by 2025 (North West): 24% (Savills)
  • Manchester population growth: +100,000 by 2025

In short, Manchester is an excellent all-rounder, highly regarded by professional and institutional investors, and it remains one of the most obvious choices for buy-to-let property investment in 2020.

Additional reading:

For more information, please download our guide to Property Investments in Manchester: 

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