7 key reasons to invest in Manchester properties
A key member of the Northern Powerhouse – a cluster of leading cities in the north of England that together form a super economy to rival London, Manchester is the UK’s third-largest city in terms of a population of more than 2.8 million (ONS 2020). Renowned for its architecture, culture, musical exports, media links, scientific and engineering expertise, sports clubs and transport connections, Manchester’s business strengths have enabled it to develop a strong reputation as a competitive place to do business. In consequence, the city has seen considerable development and regeneration in the last 20 years, generating a lot of interest and demand to invest in Manchester properties.
1. Manchester property prices are on the rise
Manchester property prices rose by 5.7% last year, and the strong demand for investment property has continued at the start of 2021 despite the Covid-19 pandemic. Manchester has a wide range of investment property types, from traditional terraced streets of many inner-city areas to higher-priced family homes in suburbs such as Chorlton and Didsbury. There is a thriving short-let market, and with the biggest student population of any city outside London, there is plenty of demand for student lets. Prices in most areas are still very affordable compared to those in the South of England, making Manchester an interesting city to invest in properties.
2. World gateway
Manchester Airport is located at the heart of the northern region’s motorway system, and it can be reached in 20 minutes by train from the city centre. Manchester Airport provides all the connections required of a global city; it connected 29 million passengers in 2019 with 210 destinations worldwide, operated by 60 airlines. Great connectivity and easy access from the airport to the city centre are other reasons to invest in Manchester properties, especially those located in Manchester City centre, as these are not only great for rental but have the potential to appreciate in value over time.
3. Booming economy
Manchester has an outstanding reputation as a competitive place to do business. More than 2,000 foreign-owned companies and leading brands such as Amazon, Cisco, Google, IBM, Jaguar, Land Rover, Unilever and Siemens have all their offices and businesses here.
Manchester is the most successful city for attracting foreign direct investment outside London in many industries. The birthplace of the Industrial Revolution, Manchester continues to be a city of innovation with well-established and globally renowned sectors, including advanced materials, cyber-security, fintech, healthcare, life sciences, manufacturing, and creative digital and tech sectors shaping the city’s future.
Pioneering companies, large and small, are adding to job growth, offering plenty of opportunities for young professionals. As a result, Manchester is an attractive city for property investors, particularly for those targeting young professional rentals.
A big factor in the city’s success is the establishment of MediaCityUK, a regeneration project transforming the former Manchester docks in Salford Quays. This purpose-built digital hub is home to companies like the BBC, ITV and Mediacom.
The city’s creative, digital and tech ecosystem houses more than 10,000 businesses; from start-ups to SMEs to globally renowned brands. The city’s tech and start-up scene do so well thanks to a sustainable flow of graduates from the city’s five universities, many of whom pursue creative, tech and digital degrees or apprentice-led courses. As a result, businesses have a wide range of talent to choose from.
4. Regeneration drives demand to invest in Manchester properties
Manchester is one of the fastest-growing cities in Europe. The city’s skyline is being transformed by six skyscrapers currently under construction, with 11,135 residential units being built and more than 1.5 million square feet of office space completed in 2019. Continuing investment shows confidence in Manchester, and in September 2020, Manchester City Council announced over GBP 1bn worth of new investment schemes, including a GBP 350 million Manchester arena, a GBP 85 million investment to build 3 towers with 634 new homes as part of the Northern Gateway scheme and a 2,000-room co-living scheme.
5. Buy-to-let demand from a fast-growing population
Manchester’s population is growing faster than the national average. It also benefits from a large student population, with around 20,000 deciding to remain in Manchester after graduating each year. Manchester’s population is one of the youngest in the UK, with around 60% living in the city aged between 25 and 30. The city centre population is forecast to grow by 125,000 by 2025, a number that will put severe pressure on the local authority and housebuilders’ ability to keep pace with the demand for new homes.
6. Lifestyle city
The city and region offer a quality of life unlike any other in the UK, attracting young professionals, families, and tourists from around the world. Manchester has something to offer everyone and is well-known for its music and performing arts scene, gastronomy and nightlife, sport and leisure facilities. Through its motorway network, the Lake District, Pennines and Peak District are just a short drive away. In 2019, Manchester was the most popular tourist destination outside of Edinburgh and London.
7. Large student population
Manchester has five of the UK’s leading universities known for their excellence in teaching and research and strong industry collaboration. The University of Manchester ranks in the world’s top 30 and is the UK’s largest single-site university campus, attracting high numbers of students from the UK and around the globe.
There were 90,000 students across Greater Manchester’s five universities in 2019, but only 24,000 purpose-built student accommodation beds available in the city centre according to figures from the 2018/19 academic year. Consequently, there is a steady demand for new student developments, which drive the city’s buy-to-let market. Investors will do well to consider investing in the student property market, and with demand for accommodation exceeding supply, landlords can expect high demand from students and young professionals.
There are also opportunities in the high-end student apartment market, as many students, particularly those from overseas, are searching for the accommodation of a higher standard that can provide buy-to-let investors with long-term higher returns.
Is now the right time to invest in Manchester property?
Property values in Manchester had one of the biggest gains in house price growth at 6.0% for the last 12 months compared with the national average of 4.3%. Property values are growing at two times the London rate, and the gap is forecast to widen in the coming years. Manchester is also expected to see the highest rental growth of any UK city over the next five years.
House prices in Manchester remain affordable, particularly compared to other cities in the north-west, with prices of flats in Manchester selling for an average of c. GBP185,000 in December 2020. With plenty of investment opportunities and below-average house prices, plus the fastest-growing rental yields and property prices of any in the UK locations, Manchester is a prime investment opportunity to consider when it comes to buy-to-let investments.
To learn more about Manchester property investments, the city’s hotspots and whether Manchester is the right location for your investment, please contact a Lifestyle Property expert for an initial consultation, where all your property investment questions can be answered.