Complete 2023 Guide.

Manchester Property Investment

Manchester Property Investment: Complete 2023 Guide:

Property Investment Manchester: Is 2023 the Right Time To Invest?

A city of culture, business, and leisure, Manchester property investment has long been catching the eyes of property investors in the UK.

With more investment properties than you can shake a stick at, and property prices far below the UK average, it seems like an obvious choice for investors in 2023.

But is Manchester property the right choice for you?

Let’s find out in this guide:

Contents
  • Investment Property for Sale Manchester
  • Manchester Property Market 2023
  • Student Property Investment in Manchester
  • Manchester Population
  • The Manchester Economy
  • Manchester Regeneration
  • Best Areas to Invest in Manchester and Greater Manchester
  • What’s it Like Living in Manchester?
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Manchester Property Market 2023

Manchester’s property market had an explosive year in 2021, with most of the data now pointing to property investment in Manchester as a top choice in 2023.

Like house prices, for example:

The average property price in Manchester is currently £210,534, according to official Land Registry data.

Not only is this £60k cheaper than the UK average, but Manchester rental yields are also higher than a typical UK property.

Using the city’s average rental prices of £1,491 PCM, Manchester investment properties can generate an average rental yield of 8.50% – the second-highest in the UK behind Southampton (8.79%)

It gets better:

According to the latest JLL residential market predictions, Manchester has the highest predicted growth rate in the North, with a 4.7% yearly house price growth from now until 2026.

Sizeable rental price growth is also expected by JLL, with Manchester rental prices to rise by 2.9% on average per year over the same period – higher than both Liverpool and Leeds (2.6%).

So: What’s the bottom line?

In a Manchester investment, you can expect higher returns, lower property prices, and higher rental income than most UK cities.

Of course, the city isn’t perfect, with below average capital growth in 2021 of 6.74%. It’s also less affordable than some other popular cities.

Be sure to check out our blog on the best places to invest in UK property to see how Manchester sizes up to the competition.

Are you looking for the best areas to live in Manchester? Check our guide.

So, What About Rental Demand in Manchester?

It’s all well and good having excellent return potential, but if there’s no demand for rental property, it would all be for nothing.

Thankfully for those investing in property, there’s been some substantial rental market demand for the past few years in Manchester.

A report in October 2021 from property management company Urbanbubble found that there were fewer than 427 flats available to rent in Manchester – a record low caused by demand sky-rocketing in the city.

In context, this even more impressive:

Around 9,200 new homes went to market since the start of 2020, with over 2,750 lettings occurring in Q3 2021 alone – 10.3% higher than the same period in 2019.

Better yet, Urbanbubble found that it took just 45 days for rental property to get snapped up in Manchester – a headline figure for the UK property market.

Is Manchester a good place to buy a property? View our complete guide.

Best Areas To Live In Manchester (2023)

Manchester city center, Salford Quays, Ancoats, Northern Quarter, and Didsbury offer great investment potential.

Manchester Population

Manchester’s varied population allows for a very versatile investment in 2023.

According to government data, there are over half a million people living in Manchester, with around 37% aged between 18 and 34.

This is significant:

Young people and young professionals are typically the lifeblood of a property investment, with this age group far more likely to rent – and stay renting for the considerable future.

Want to know the best part?

This age group percentage will likely keep increasing.

Population estimations suggest Manchester will see 56,000 more people in the city by 2034, with 3,100 high-salary jobs predicted to be added each year, according to Cushman & Wakefield.

As such, investors will likely benefit from investing in Manchester city centre to target this age group – just remember to make sure your apartments are spacious enough to work from home, with outside space acting as a massive bonus in the 2023 rental market..

Student Property Investment in Manchester

Thanks to Manchester’s population made up of young professionals, Manchester real estate investors have their pick of several different investment strategies.

And while residential property is usually the first thing to come to mind, student property investments can also be a neat way to invest in Manchester.

Here’s why:

Student accommodation tends to be far cheaper than traditional residential property, with student apartments typically found below £100k.

They also generally offer higher rental yields than residential property because of the price, with both HMOs and purpose-built student accommodation known to deliver sound returns.

These factors are especially seen in Manchester, which is one of the world’s most iconic student cities with around 100,000 students in Greater Manchester.

A large bulk are focused around Manchester city centre, with campuses for the University of Manchester and Manchester Metropolitan University found in popular nearby areas like Fallowfield.

The city is also popular for international students, with around 20,000 in the region. This is especially important for those investing in PBSA, with international students up to 2.2 times more likely to rent PBSA according to Savills.

Want to learn more about Manchester buy to let investment? View our complete guide.

Things to Keep in Mind Before Making a Student Property Investment Manchester

Although student property investment opportunities are growing in popularity in Manchester, the reality is they’re not for everyone.

In fact, research from BVA BDRC found that only 13% of landlords are currently renting to student tenants.

So, you might be wondering:

Is investing in student property the right thing for you?

Well, there are some things you should consider:

  1. Your goals – Student property doesn’t offer as much long-term growth as residential homes, so student investments are more suited to income-driven investors.
  2. The Type of Property – The success of your investment will depend heavily on what type of student accommodation you choose to buy, with more PBSA than ever getting built. This is key for HMO investors, who are usually unable to compete with the facilities on offer in PBSA.
  3. Additional Costs – Most student homes can come with additional wear and tear, which can lead to higher maintenance costs. If you invest in PBSA, you may also need to pay property management fees.
  4. Summer Void Periods – If you’re reliant on the income generated from real estate, you may be hesitant to invest in student houses as they are usually vacant outside of the academic year.

Another thing you need to ask yourself is:

Is Manchester even the best place to invest in student property?

Research from Paragon suggests Manchester may not be the stand out location for student property investment, as it didn’t appear in the top 10 list.

In fact, the nearby Liverpool ranked fourth, with returns available of 8.25% and average house prices of £225,178.

As such, if you’re focused on the North West region for student investments, Liverpool may be a better choice – although, this all depends on the specific property you’re choosing to buy.

Want more information on Manchester property? View our complete guide.

Download 2023 Property Investment Guide

Looking To Invest In Manchester?
Five Key Reasons To Invest.

A thriving economy usually leads to a higher amount of young professionals, which is key for anyone considering a real estate investment.

The good news is that Manchester’s economy is one of the biggest in the UK, and is set to see higher growth than anywhere else!

According to Oxford Economics, Manchester is set to see the highest rate of economic growth out of every major UK city over the next five years – with a GVA growth of 16.4%.

Perhaps key for those thinking of investing in Manchester is the fact that the city has a diverse economy, with major industries in manufacturing, energy, life sciences, finance, and media.

But why does this matter?

Well, if a city is reliant on only one industry and that industry collapses, you could see thousands of people unemployed – think of Northern cities after the closing of the coal mines in the 1980s.

By investing in a city with a reliable and diverse economy, you can expect to avoid the chances of this as much as possible.

Manchester rivals any places in the UK when it comes to economic output and employment, with major businesses like the BBC leaving London to move to Manchester thanks to operating costs being 40% lower.

Better yet:

The Centre for Cities found that Manchester job creation outpaced global powerhouses like Tokyo, Berlin, and Paris between 2015 and 2020.

These are all good signs for anyone considering a buy to let investment in Manchester.

Regeneration is vital for a cities success, with future development creating more jobs, more homes, and more opportunities to invest.

Sounds great, right?

Well, Manchester offers regeneration in bucket loads, with billions spent already adding vital residential and commercial space to Manchester city centre and beyond.

The three major regeneration efforts that have already boosted the city massively are:

  1. Spinningfields – A £1.5bn regeneration scheme that added Grade A office space for 150 financial companies in Manchester city centre.
  2. MediaCityUK – The Salford-based home of the BBC, ITV, and more, that saw £2bn spent reviving Salford Quays docklands.
  3. NOMA – An ongoing £800m mixed-use development that added four million sq.ft. of residential, office, and retail space in Manchester City centre.

Aside from these, there’s plenty of Manchester regeneration schemes in the pipeline or ongoing, including:

  • HS2 expansions to Manchester Piccadilly and Wigan
  • The £1bn Northern Gateway Redevelopment

Both of these schemes will likely boost jobs even further, and is worth keeping a close eye on if you’re debating Manchester property investments and rental properties.

If you’re looking at investment property in Manchester, then you’ll want to make sure you’re investing in the best Manchester buy to let areas possible.

As such, we’ve done the hard work for you and have calculated the best rental yields in Manchester based on average rents and average property prices.

The best postcodes for buy to let properties in Manchester are:

  • M7 – 9.80% average yield.
  • M14 – 9.73% average yield.
  • M3 – 8.72% average yield.
  • M38 – 8.28% average yield.
  • M11 – 8.07% average yield.

These five postcodes offer the highest average yields and can be considered when building a Manchester property portfolio.

Other postcodes worth mentioning are M5 and M4, which offer returns above 7.85%.

To get the full picture and see the average rental yields for every Manchester postcode, use our interactive postcode map below.

So, how about the wider Greater Manchester area?

As expected Manchester comes out on top for rental yields with an average of 8.50%.

However, this is closely followed by Salford, with returns of 8.47% available.

Other top performing areas include Bolton and Bury, with returns of 6.32% and 6.10% respectively.

It gets worse after this, with other areas offering returns falling below 6%, and reaching a low of 3.57% in Trafford.

The term iconic gets thrown about a lot, but Manchester could be worthy of the title.

With a world-class shopping sector, and more leisure attractions than you can shake a stick at, living in Manchester is an ideal escape for so many people.

In fact, the Global Liveability Survey voted Manchester as the UK’s best place to live, based on a variety of factors, including:

Health care, education, culture, environment, and infrastructure.

Thanks to these attractions, Manchester’s rental market is in high demand, with property investment in Manchester becoming one of the most sought after amenities in the UK.

Want to learn more about the best areas to invest in Manchester? View our detailed guide.