The city of Manchester is quickly becoming an investment hotspot in the UK, with Manchester property in high demand. A location that is proving to be a strong alternative for investors frustrated by the rising costs and shrinking yields in London. Based on strong economic credentials, capital and yield growth levels, Manchester has the strongest regional rental investment rating in the UK. With it’s excellent transport infrastructure and becoming the second largest economic hub in the UK,1 it’s no wonder the city was voted the UK’s best city to live2.
Here are our top 5 reasons Manchester is an excellent investment option:
1. Strong rental performance with growing yields
In 2015, Manchester was identified by HSBC as the UK’s buy-to-let hotspot, with average yields of 7.98% surpassing any other city. Average rental yields since 2010 have grown on average of 6.02%, compared to 4.71% over the same period for real estate in London – the UK’s highest yielding borough.
2. Great expectations for economic growth
Manchester is positioned in centre of the England’s Northern Powerhouse and over the years, the city will benefit from the UK Governments investments in the region. This will include investment into transport infrastructure upgrades, skills, culture, innovation, businesses and more. These investments will aid an economic boost for Manchester and provide more jobs. The result will see an increase in population and the amount of people commuting into Manchester for work, reducing the dependency on the borough of London3.
A planned £1 billion airport expansion will increase the annual passenger capacity to over 55 million and is expected to establish the city as the primary transport link between Northern UK and the remainder of the world. To top it all off, Manchester currently has one of the most rapidly growing job creation rates in the country. There was a 47% increase in advertised jobs during the month of April 2015 alone4.
3. An emerging city fuelling growing property demand
Manchester’s population has grown substantially over the years with a 19% increase between 2001 and 20115. This number is expected to increase by 125,000 by 2025 due to the infrastructural and economic growth that is forecast in the coming years. With population growth comes demand for property which is expected to see sustained growth into the future.
4. A property under-supply
Manchester currently has a critical under-supply of housing which has instigated a growth in new developments in the city6. However, as Manchester continues to grow and demand for property stock increases, property developers will be expected to keep up with the demand and ensure an avoidance of future under-supply7. This opens up a variety of opportunities for investors long term. However striking while the iron is hot, may be the best option for maximising investment and avoiding a competitive market.
5. A young generation in demand of rental property
Rental demand in Manchester has become quite strong and almost 30% of housing in Manchester is rented. For investors, it is crucial to consider the shifting demographic of the city as a large number of the population are Generation Y. As housing is often unaffordable for this generation, renting becomes the most common option. In addition, Manchester is home to Europe’s biggest University campus in which more than 100,000 students (both domestic and international) currently attend9. Manchester also has four other Universities also adding to the demand in rental property. This provides opportunity for investors to supply high quality dwellings to accommodate the renter and student lifestyle8.
To view the latest properties in Manchester, log into your Investorist account here or book a meeting below with one of our friendly UK staff.
- Alliance Investments Ltd.
- Visit Manchester
- Northern Powerhouse UK
- Select Property Group
- World Population Review
- GMS Financial
- Luxury Property SG
- Barrows and Forrester
- Hanover Square