Should you Consider Manchester Property Investment?
Located in Greater Manchester, Manchester is one of the most exciting places to live and work today, with many young professionals flocking to the city for its excellent employment prospects. Experiencing the fastest growth outside of the capital and leading the way in property investment, Manchester has a very promising future ahead.
The city’s population continues to grow at an incredible pace, benefiting from the rise of people leaving London for a more affordable lifestyle. Today, Manchester is considered as the UK’s top rental hotspot with house prices increasing at a rapid pace. Buy-to-let properties in Manchester are in huge demand and have some of the highest occupancy rates in the UK.
Manchester House Price Predictions
Manchester’s vast population growth has put a huge amount of pressure on the city’s housing supply and as a result, Manchester has seen a property boom in recent years. The city has seen impressive growth in house prices – according to HM Land Registry, house prices increased by 14.7% in 2022, equating to an increase of over £30,000.
Unlike most of the UK, house prices in Manchester actually look set to continue to rise throughout 2023, albeit at a slower rate than years prior as the UK market stabilises following a substantial period of exponential growth. According to JLL’s Residential Forecast, in the years following 2023 house price growth is forecast to increase every single year – culminating in an extremely impressive 19.3% increase across the 2023-27 period. To put this into context, if you invested in a property in Manchester for £300,000, you could expect a capital uplift of around £57,000 in the aforementioned period, all whilst generating income via rental payments.
Manchester rental market
Speaking of rental income, the rental market in Manchester has experienced a huge boom in the last few years as more and more young professionals move to the city thanks to the vast number of opportunities on offer. This increase in demand has seen apartments throughout Manchester being let at a premium, resulting in huge increases in recent times.
According to the JLL Cities Index for Manchester, there was a 22% growth in achieved rents for new developments in the city centre in the year to December 2022, and this is showing no sign of slowing down. In the aforementioned Residential Forecast from JLL, they forecast that rents in Manchester are set to increase by 6% in 2023, followed by an impressive 21.6% in the 2023-27 period – over 5% higher than the national average.
With unprecedented demand for rental properties in the city paired with consistently rising house prices and rents, Manchester offers unparalleled potential for rental growth over the next few years, making the city a leading location for buy-to-let investment in the UK.
Manchester Property Investment Stats
House prices in Manchester increased by 12.9% in the 12 months to November 2022. (HM Land Registry, 2023)
House prices in Manchester are forecast to increase by an impressive 19.3% during the 2023-2027 period. (JLL, 2022)
Rents in Manchester are expected to see a 21.6% increase between 2023-2027. (JLL, 2022)
Greater Manchester’s population currently stands at over 2.8 million. (ONS, 2021)
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Greater Manchester was once known for playing a key role in the industrial revolution and today, it boasts the biggest city region economy outside of London with a gross value added (GVA) of £62.8bn.
The region has come a long way from its industrial roots and has made a name for itself in a variety of sectors including the tech and digital sector, media, advanced manufacturing and real estate. Tourism is also a huge part of Manchester’s economy – it’s the third most visited city in the UK after London and Edinburgh, and visits to the city grew by 60% between 2013 and 2019.
The region has also seen a huge number of large corporations choosing to relocate there including the BBC, ITV, Kelloggs, Siemens and The Hut Group – to name but a few. Businesses starting to see the appeal of the boroughs that surround the city, including Stockport, Salford and Trafford, have seen a large number of enterprises relocating their businesses to these areas.
Regeneration in Manchester
One of the key factors in Manchester’s sustained growth over the last few years is the vast amount of investment to regenerate key areas in the city. The last few years have seen the transformation of Deansgate, Ancoats and New Islington to name a few, and there are plenty more projects underway that will only enhance the local economy.
Piccadilly Gardens transformation
The hub of the city centre that offers transport links throughout the Greater Manchester boroughs, Piccadilly Gardens is set to undergo an extensive transformation in the coming years. Starting with the knocking down of the much-maligned concrete wall in 2020, the £2m re-invention of Piccadilly Gardens is set to completely transform the deteriorating region with improved lighting, newly raised grassed areas and planting, a children’s play area and the transformation of the Pavilion Wall.
Expansion of the Metrolink system
Manchester’s Metrolink system has expanded its services from the city centre to various corners of the region including Altrincham, Rochdale and Ashton-Under-Lyne. The GMCA is aiming for all journeys in the region to be made via cycling, walking or public transport by 2040, with plans in place to extend the Manchester airport line to Wilmslow and to develop a tram-train service that will run from Manchester to various locations on the outskirts including Stockport, Wigan and Glossop.
MediaCityUK Phase 2
MediaCityUK has completely transformed the Salford Quays area and played a key role in making Greater Manchester the economic powerhouse it is today. The area has attracted huge corporations such as the BBC, ITV, Kellogg’s and BUPA, and brought around 7,000 jobs into the area. Over the next decade, MediaCityUK is expected to double in size with plans for 10 new buildings in place – these will include office spaces, retail spaces and build-to-rent homes. The expansion is being backed by £1bn of private investment.
Manchester Population Growth
Manchester has completely transformed itself in the last few years to become one of the UK’s leading cities to live, work and invest in. Thanks to a vast amount of regeneration both within the city centre and the surrounding areas, the attraction of moving to Manchester has significantly increased, and as such, so has the population in the city.
According to the ONS’ 2021 Census, the population in Manchester is 552,000 as of 2021 – a 9.7% increase in the 10 years prior. This is higher than the overall increase in England (6.6%), highlighting just how quickly the city is growing, but what does this mean for Manchester property investment?
There is already a major imbalance between the demand for rental accommodation and available stock on the market at the moment, and as the city’s population continues to increase this will only lead to a further surge in demand for property in the area, thus pushing both property prices and rents up.
Manchester: A Student City
Manchester and its surrounding areas are home to three of the UK’s leading universities. The University of Manchester is the largest single-site university in the UK and part of the prestigious Russell Group of universities; Manchester Metropolitan University is the UK’s number 1 sustainable university and one of the most popular choices in the country; and the University of Salford is one of the leaders in Arts, Media and Creative qualifications with a state-of-the-art studio in the heart of MediaCityUK.
This impressive collection of universities in such close proximity has resulted in a massive influx of students moving to Manchester. The city is home to one of the largest student populations in Europe, with over 100,000 students enrolled at the universities throughout, and according to Centre for Cities, over 50% of students in Manchester choose to remain in the city after graduation. The consistently high student numbers allow for student property investment in the city to be a lucrative investment outlet, whilst the high retention rate means that the majority of students who stay will be in need of rental accommodation in the city, adding to the already high tenant demand in Manchester and bolstering the buy-to-let market.
Connectivity and Transport
Manchester is one of the most well-connected cities in the UK, with numerous public transport options available to get you in and around the city so, no matter where you are in the region, you should have no issue getting around. Manchester Metrolink, the city’s local tram system, reaches various parts of Greater Manchester and the city’s two main railway stations, Manchester Piccadilly and Manchester Victoria, have direct links to the whole of the UK.
The High Speed 2 rail link will connect London with the North of England, the Midlands and Scotland in the hopes of improving connectivity across the country. The highly anticipated rail link will reach Manchester in its second phase where it will be extended from Crewe to Manchester Airport and Manchester Piccadilly. The rail link will also provide Manchester with a high-speed link to Leeds, Birmingham and the East Midlands. HS2 will boost Manchester’s economic potential even further by relieving pressure on Greater Manchester’s railway services and increasing capacity for commuters. Those commuting to and from Greater Manchester will also have significantly shorter journey times to key cities like London and Birmingham.
Where at the Best Areas for Manchester Property Investment?
Ancoats is one of the most exciting and up-and-coming areas in the centre of Manchester. Once the centre of the UK’s industrial revolution, the region has been transformed thanks to substantial investment to become one of the UK’s most sought-after neighbourhoods. Demand in Ancoats has soared, with the region named by Time Out as the 20th ‘coolest place to live in the world’, a testament to the area’s regeneration and a massive boost for the property market in the area.
New Islington is home to a plethora of new homes and amenities as well as a beautifully serene marina offering tranquil city living, all within walking distance to Manchester city centre. The regeneration in the area has seen New Islington’s popularity and investment potential soar in recent times as the neighbourhood continues its exponential growth and solidifies its status as one of the most desirable places in the UK to both work and live.
Deansgate is one of the most desirable regions to live and invest in Manchester. Home to the likes of the towering Hilton Hotel, the stunning John Rylands Library and the Deansgate Locks, the area has transformed into one of the city’s leading property hotspots. Deansgate features excellent transport links, thriving bars and restaurants, and some beautiful architecture that has seen tenant demand skyrocket in the area to offer an excellent property investment location.
Previously the site of Manchester Docks, Salford Quays has become one of the UK’s earliest and largest urban regeneration projects following the closure of the dockyards in 1982. Fast forward to the modern day, and Salford Quays features iconic landmarks such as The Lowry, The Imperial War Museum, Manchester United’s football ground Old Trafford and MediaCityUK – all contributing to a booming economy and excellent property market.
Manchester Property Investment FAQs
Is buying property in Manchester a good investment in 2023?
Manchester is one of the UK’s leading buy-to-let cities, having experienced a large amount of growth over the last few years. In the 2023-27 period, property prices are set to increase by an impressive 19.3%. Rents are also set to increase by 21.6%, making Manchester property a good investment.
What is the average yield for properties in Manchester?
According to PropertyData.co.uk, the average rental yield in Manchester currently stands at just under 5%. The leading postcode district in the city is the M6 area, with an average rental yield of 6.6%. Rental values in Manchester are forecast to increase by almost 22% in the 2023-2027 period, according to JLL.
Is Manchester well suited to a first-time property investor?
Manchester benefits from predominantly lower entry-level property prices than the likes of London, making it more attainable for first-time investors. With both house prices and rents set to increase in the coming years, Manchester offers an excellent location for property investment for a wide variety of investors, including those investing for the first time.
What properties do you currently have available for investment in Manchester?
We currently have a number of available investment properties available in Manchester and its surrounding areas. From high-yielding stunning student apartments to luxury residential mill conversions and high-end skyscrapers across the city. Take a look at our available Manchester property investment opportunities here.
What regions in Manchester are best for property investment?
Manchester benefits from a number of extremely popular areas for investors to choose from. City centre locations like Ancoats, New Islington and Deansgate continue to benefit from numerous regeneration projects in the centre, whilst surrounding regions such as Salford Quays, MediaCityUK and Stockport to name a few are also high in demand.
What is the average house price in Manchester?
According to data from HM Land Registry, as of November 2022, the average house price in Manchester stands at £237,280, up by an impressive 12.9% from the year prior.
Why choose Knight Knox for Property Investment in Manchester?
Knight Knox make investing in property simple. We are market leaders when it comes to the sale of off-plan buy-to-let properties for the private investor market, particularly in Manchester. We have almost 20 years of experience in helping clients find their perfect property investment in the Manchester area, offering a personal service to ensure all of your needs are met.
Our track record speaks for itself. We have launched over 100 developments with a total value of over £1.2 billion, over 90 of which are now completed and tenanted. Whether you are a first-time investor or looking to build on an established portfolio, we are certain to have the perfect property for you!