Manchester property

Manchester

The UK’s original industrial city, Manchester is a huge city for UK property investment. Manchester buy-to-lets have grown quickly, with the city centre home to hundreds of buy-to-let apartments. Further afield, areas like Salford, Media City, Ancoats and NOMA are hugely popular with residents and investors. 

As the key city in the UK’s Northern Powerhouse, Manchester is an economic success story that has welcomed business from around the world. With multiple regeneration projects in full swing and good connectivity to London and Birmingham, we’ll look at why Manchester is a good place to invest in UK property. 

Find the best areas to invest in Manchester, learn why people want to live in the city and discover how Manchester compares to other UK cities. 

How much does it cost to invest in Manchester property?

The average house price in Manchester is £208,000. Using a standard 20% deposit, an investor would need a £41,600 deposit to purchase a property in Manchester with a mortgage 

Average Manchester house price compared to other cities (Source Zoopla, May 2022)

Location 

Avg house price 

Birmingham 

£196,200 

Manchester 

£209,100 

Southampton 

£252,800 

Milton Keynes 

£300,400 

London 

£516,100 

In the last 15 years, Manchester property prices have risen 48%, which is faster than any of the other large cities in the north of England, such as Liverpool (24% rise in average property prices since 2007), Leeds (35%) or Sheffield (32%). 

Why are property prices rising so quickly in Manchester? It’s the standard UK housing issue of supply versus demand. Despite the boom in high rises in Manchester over the last 10 years, there’s still simply not enough accommodation to house the demands of a growing population. 

That’s why we advise investors to buy property when they can, rather than wait for cooler market conditions. Capital gains are attractive when the value of these in-demand assets keeps rising. The JLL Residential Forecast for 2022-2026 predicts Manchester property prices to continue to grow. Over the next 5 years, they predict a 25.8% growth in house prices, which is far ahead of the UK average.  

How much does it cost to rent in Manchester?

Manchester’s average rent is £856 pcm. This is up 14.3% year-on-year using Q1 2022 figures from Zoopla. This means Manchester is the city with the highest year-on-year rental growth in the UK, above Belfast (+13.7%) and Birmingham (+13.0%).  

Average rents per month by city, March 2022 (Source Zoopla, March 2022) 

Location 

Average month rent 

Annual % change 

Manchester 

£856 

+14.3% 

Birmingham 

£767 

+13.0% 

Leeds 

£792 

+11.5% 

London 

£995 

+11.0% 

Liverpool 

£673 

+8.9% 

The rising rental costs give investors a chance to start earning excellent returns on their property investment. Plus, with an average time to rent of just 12 days, there’s little risk of costly void periods. 

Manchester’s affordability (defined as rent as a proportion of single earner gross income) is surprisingly poor compared to other UK cities. Manchester affordability sits at 35%, which is worse than the UK (exc London) average of 30.8%. In fact, the neighbouring cities of Liverpool (27.4%) and Leeds (29.0%) are more affordable.  

But, this is doing nothing to slow the influx of residents in to Manchester. So why are so many people desperate to live in Manchester? 

Manchester investment property

Why should you invest in Manchester?

Residents want to live in Manchester thanks to its mixture of economic prosperity, job creation and appealing lifestyle options. And if residents want to live here, it means that investors can find tenants for their Manchester buy-to-let apartments. 

Let’s look at the different reasons that make Manchester such a good investment opportunity. 

Manchester has developed significantly since the industrial decline of the 1970s and 1980s. Spurred on by regeneration projects across the city, the urban landscape has changed dramatically. Some of the largest regeneration projects are listed below. 

MediaCityUK 

One of the original projects, MediaCityUK was first developed in 1985 by Salford City Council. In 2007, it was pushed further and is now home to the BBC and ITV, along with some 250 other businesses, apartments and leisure interests. MediaCityUK will see investments of over £1 billion to double its existing footprint by 2030. 

Mayfield 

Once a dull brownfield site by Manchester Piccadilly train station, Mayfield is being transformed to a multi-use 30-acre neighbourhood boasting 1,500 homes, 130,000 sq m of office space and a new city centre park. It is envisaged Mayfield will create more than 10,000 office, retail, leisure and construction jobs. 

Spinningfields 

Spinningfields is Manchester’s financial centre. Home to Royal Bank of Scotland, Spinningfields sees tens of thousands of commuters fill the 14m sqft site on a daily basis.   

NOMA 

NOMA is next to north Manchester’s key rail terminus, Manchester Victoria. It houses Angel Square, the headquarters of The Cooperative Group as well as several brand new apartment developments. It cost more than £800 million to create. 

The transport infrastructure of Manchester has grown over the last 10 years with a sophisticated train network spreading far out into the suburbs. Manchester will also benefit from the arrival of the HS2 high-speed rail line, which will cut travel time to London and Birmingham.  

 

Manchester is one of Europe’s brightest business centres. Recognised as the UK’s second largest creative, digital and tech hub, the city has welcomed businesses that have chosen to “Northshore” (the process of moving operations out of London and further north). 

More than 80% of the FTSE 100 have a presence in Manchester. Kellogg’s, Talk Talk, Adidas and The Cooperative Group all have headquarters in the city. Prominent national broadcasters the BBC and ITV both operate out of Media City.  

This influx of big business has pushed Manchester’s Gross Added Value (GVA) to £62.8 billion (source; ONS 2016), which represents 3% of the entire UK’s GVA.  

Forecasters now predict the Manchester economy will grow 14.49% by 2026. It’s this economic growth that is drawing both state and private investment to the city, which is good news for both residents and investors. 

Manchester was named the 3rd best city in the world by Time Out magazine in 2021. Globally recognised as a destination for both business and pleasure, the population of Manchester city itself has grown by more than 16% in the last 10 years, standing at over 590,000 now. It is predicted that, in the next 10 years, the population will rise by another 14% (source; MCCFM PRI 2020). 

This population growth is likely to be focused around the central areas of Deansgate and Piccadilly, with Deansgate itself predicted to be the most populous area in Manchester by 2030. These residents will be housed in some of the high-rise apartments that are currently springing up in the city centre. 

With 5 major higher education centres, much of this influx will be skilled graduates who chose to stay on after studying. Again, this population will need accommodation and will choose to rent in central areas of Manchester.  

What are Manchester rental yields?

Manchester offers some of the highest rental yields in the UK, sitting around 6.3% on average. The average rent for a city centre one-bedroom apartment is about £1,050 pcm and the average price of the same apartment is around £200,000. 

This is much higher than the London equivalent and means investors can enjoy returns on their investment immediately. The starting price of apartments is also much cheaper than the capital. 

Plus, Rightmove estimates that demand outstrips supply in Manchester by 5:1; meaning for every home there are 5 prospective residents. This means that investors can avoid rental voids and be sure of tenants for years to come. 

Manchester

How you can invest in Manchester property?

At Hoxton Property, we work with some of the region’s top developers such as The Heaton Group and Salboy to give you access to hand-picked Manchester buy-to-let developments. If you don’t know Manchester or have never visited the city, let our local experts find the right investment for you and your goals.  

Speak to us today to find out how we can get you fantastic capital gains and rental yields on your next Manchester property investment. 

How can we help you?

If you would like to speak to one of our advisers, please get in touch today.

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