Property Investment in Manchester: Securing Solid Returns

As an investor seeking healthy returns, you may want to look north to one of the UK’s fastest-growing cities. Manchester, long an economic powerhouse, is experiencing a renaissance that positions it as an ideal city for property investment. With a booming economy, rising population, and urban regeneration transforming the city, Manchester offers solid fundamentals to support robust and long-term property price growth.

Property investment in Manchester boasts promising indicators that point to continued prosperity. As the city reinvents itself, areas once characterised by post-industrial decline now rank among the UK’s most vibrant, livable neighbourhoods. For investors seeking stability and value, Manchester deserves consideration as a city of the future with returns to match.

Property Investment in Manchester: Is It Worth It?

Average property price: £304,988

Projected house price growth by 2027: 11.7%

Projected rental growth between 2022 and 2026: 18.2%

Projected Greater Manchester’s economy (GDP) by the end of 2023: £71 billion .

Manchester has long been an attractive location for property investment in the UK.

Here are some of the key reasons why investing in Manchester property may be worth your consideration:

  • Solid Rental Yields and Capital Appreciation Potential: Manchester offers some of the highest buy-to-let yields in the UK, currently around 6–7%. House prices have also grown by about 75% in the last decade, demonstrating solid capital appreciation potential.
  • Vibrant Economy and Job Market: Manchester has a thriving, diverse economy with significant sectors like financial & professional services, science & technology, and creative & digital. As such, the city has experienced significant job growth and economic investment. Population and employment levels are projected to continue rising over the next 10–15 years, fueling further demand for housing.
  • Significant Regeneration and Infrastructure Projects: Billions of pounds of investment are transforming Manchester, including the £1 billion Northern Gateway project and £330 million Manchester Life development. New infrastructure like the £1 billion Metrolink tram expansion and £650 million Manchester Airport transformation are also enhancing the city’s connectivity and growth potential. Now is a good time to invest in a ​​buy-to-let property in Manchester.
  • Solid Rental Demand: Manchester has a large student and young professional population, resulting in buoyant demand for quality rental accommodation. The proportion of people renting has increased over the last decade and is expected to continue rising thanks to several economic factors.

Manchester is poised for continued economic success and property price appreciation due to its vibrant economy, urban regeneration, infrastructure improvements, and swelling population. As such, buying property in Manchester is a promising opportunity for investors seeking stable returns and long-term growth.

Manchester’s Housing Market Is Going From Strength to Strength

Manchester’s housing market is experiencing significant growth. House prices in Manchester are projected to increase by 11.7% by 2027. A booming economy, regeneration of the city, and population growth fuel this trend.

With a thriving economy, an influx of infrastructure and real estate investment in Manchester, and more people wanting to live in the city, Manchester’s housing market is poised to continue its upward trend. For property investors, now is an ideal time to enter the market to take advantage of increasing values and strong rental yields.

Here are several vital facts to support this notion:
  • The Manchester economy has outpaced the UK average for the past decade. Major employers like the BBC and Amazon have relocated to the city, creating high-skilled jobs. The city’s two major universities also provide a pipeline of talent.
  • Ongoing regeneration has transformed Manchester into an attractive, modern city. New developments like MediaCityUK, Spinningfields, and Ancoats have brought residential, retail and commercial opportunities. Infrastructure improvements, such as the expansion of the Metrolink tram network, make it easy to navigate the city without a car.
  • Manchester’s population is growing at about 1.5x England’s rate (9.7% vs. 6.6%). The city attracts young professionals and families drawn to its job prospects, lifestyle amenities, and comparatively affordable cost of living. This high demand fuels the rental market as well as home sales.

Rental Demand Soaring in Manchester

Demand for rental property in Manchester has increased steadily over the last decade. Rents in Manchester rose by 19.3% in 2022, compared to 2% across the UK.

Economic Solid and Population Growth

Manchester’s economy has experienced strong growth, partly driven by its strength as a hub for business, technology, and innovation. The city is home to more than 22,000 businesses and over 28,000 jobs. Moreover, Manchester’s population has expanded rapidly, growing by 9.7% between 2011 and 2021. This combination of a booming economy and surging population has fuelled demand for rental accommodation.

New Rental Developments

Many new rental developments have been completed recently to meet rising demand, especially in popular central locations. However, despite several new developments in Manchester, supply has struggled to keep up with demand, increasing rental prices.

Solid Rental Yields

For property investors, Manchester’s thriving rental market has created opportunities to achieve attractive yields. Manchester rental yields average around 6–7% for apartments, higher than most UK cities. With solid fundamentals supporting future rental growth and demand, property investments in Manchester are poised to deliver solid returns over the long run.

Overall, Manchester exhibits a compelling combination of a rapidly growing population, a thriving job market, constrained housing supply, and rising rents, making it attractive for prospective property investors seeking stable income and long-term capital gains. Partnering with a reputable investment expert can help you take advantage of this opportunity and navigate Manchester’s promising rental property market.

Manchester’s Thriving Economy Fuels Property Investment

Manchester’s robust economy and business-friendly environment have fueled its property market. Massive investments in infrastructure and urban regeneration have boosted Manchester’s economy and property market.

Some of these include the following:

  • Transport for Greater Manchester, which is improving public transit with projects like the Cross City Bus Priority scheme.
  • MediaCityUK, which brought significant media companies like BBC and ITV to Manchester.

Manchester’s job market is expanding rapidly, with an unemployment rate of only 5%. The city continues to attract many young professionals in tech, creative, and business services.

In summary, Manchester’s prosperous and diversified economy creates ideal conditions for property investment. The city’s major infrastructure projects and job growth fuel the demand for housing. This results in upward pressure on rents and property values, enabling investors to achieve healthy yields and long-term capital gains.

Regeneration Transforming Manchester Into a Northern Powerhouse

Given the exponential rise in population, Manchester City Council has invested heavily in infrastructure and amenities to keep up with demand and boost investing in Manchester.

New Housing Developments

Large-scale residential developments are underway across Manchester. For example, API Global has many regeneration developments, attracting investors to the city.

Improved Transportation

Manchester has the country’s largest tram network, Metrolink, currently undergoing a £1 billion expansion to improve connectivity across the city. Major rail projects like HS2 and Northern Powerhouse Rail will cut travel times between Manchester and London, making it an even more attractive place to live and do business. Also, Manchester Airport, the global gateway to the North, serves an impressive 199 destinations.

With a booming population, new housing and commercial developments, improved infrastructure, and a thriving economy, Manchester is realising its potential as a Northern powerhouse. The city offers property investors abundant opportunities for solid returns and long-term capital appreciation.

Why Choose Manchester Over London?

You may wonder if Manchester is any better than London.

Here are some reasons you might want to choose this Norther powerhouse over any other UK city, London inclusive.

  1. Lower Property Prices
    Property prices in Manchester are significantly lower than in London. The average house price in London is £715,584 compared to £304,988 in Manchester. This price differential means your investment capital wields higher value in Manchester, allowing you to acquire more properties for the same budget.
  2. Higher Rental Yields
    Manchester’s lower house prices and solid rental demand result in higher rental yields for investors. The average buy-to-let yield in Manchester is 6–7% compared to 2–5% in London. To put things in perspective, for every £1,000 invested in Manchester property, you can expect to receive £60–70 in annual rent, versus only £20-50 in London.
    While London will likely always reign supreme as the UK’s financial and cultural capital, Manchester offers a compelling case for investment based on its affordability, attractive yields, dynamic economy, and ongoing regeneration. For many investors, it may prove the superior choice.

Why Choose Baron & Cabot for Your Property Investment in Manchester?

When investing in a property, your first instinct will be to go through the process yourself, but this can be costly in the long run, especially when you’re new to the UK property market. A better alternative is partnering with a property investment expert like Baron & Cabot to help you pinpoint where to invest in Manchester for the best returns.

Here are some reasons you’ll love working with us:

  1. Extensive Local Knowledge and Expertise
    As an established property investment expert, Baron & Cabot has an unparalleled knowledge of the city’s neighbourhoods, property market, and economy. Our property consultants are experts in finding high-yield investment opportunities in Manchester. They have a proven track record of securing exceptional capital growth and client rental returns.
  2. Bespoke Service and Personalised Advice
    Baron & Cabot provides a personalised service to help you achieve your investment goals. Our property consultants will get to know you and your specific investment criteria. They can then recommend suitable investment properties in up-and-coming Manchester neighbourhoods with solid growth potential. Our bespoke service simplifies investment and gives you confidence in your decision-making.

Frequently Asked Questions

In 2023, is purchasing property in Manchester considered a wise investment?

Purchasing property in Manchester in 2023 and beyond is a wise investment. With expected strong growth in the North West region’s property prices over the next few years and Manchester properties offering excellent yields and relatively affordable, it’s a compelling choice for new and experienced investors.

What is the average rental yield for properties in Manchester?

The average rental yield for properties in Manchester is generally between 6% and 7%. Some specific areas in Manchester, like Salford, can even reach higher yields. However, these figures can change due to various factors, including the property type and its location within Manchester.

Is Manchester a suitable city for first-time property investors?

Manchester is a great city for first-time property investors. The city has attracted many investments due to its strong economic growth and housing demand. Its vibrant culture, excellent transportation links, and status as a central hub for businesses and education also contribute to its appeal.

Manchester is home to several universities, creating a consistent demand for rental properties from students. Plus, Manchester’s rental yields are among the highest in the UK, which is a good indicator of property investment in Manchester.

Which specific areas or neighbourhoods in Manchester are most promising for property investment?

Several areas in Manchester are highly promising for property investment, including the following:

  1. Salford: This area has been transformed in recent years with significant investment, and it’s home to MediaCityUK, where BBC and ITV have bases. These factors contribute to Salford’s exceptionally high rental yields.
  2. Manchester City Centre: This area is incredibly popular due to its proximity to shopping, dining, and entertainment options. Properties here might be more expensive, but they also tend to have strong rental demand.
  3. Northern Quarter: Known for its vibrant arts scene and indie boutiques, this area is popular with young professionals and creatives, making it an excellent location for rental properties.
  4. Didsbury: This suburb is popular with families and professionals, featuring excellent schools and convenient access to the city centre.
What is the current average price of houses in Manchester?

According to Rightmove, the average house price in Manchester is £304,988.

Is Manchester property a good investment?

Manchester is a strong contender for property investment. Its high rental yields are among the highest in the UK, making it a desirable option for investors. The city’s vibrant culture, strong economy, and excellent transportation links also contribute to its appeal.

Why invest in Manchester?
  1. High Rental Yield: Manchester boasts one of the highest rental yields in the UK (6–7%), making it attractive to investors.
  2. Growing Economy: The city’s economy is one of the fastest-growing in the UK, with a strong job market that draws young professionals and students.
  3. Urban Regeneration: Manchester has ongoing development projects, signalling the potential for property value appreciation.
  4. High Demand for Rental Properties: With a large student population and an increasing number of professionals moving to the city, the demand for rental properties is high.

Disclaimer: Any information provided by Baron & Cabot does not constitute financial advice and is for educational purposes only.