Why Manchester Trumps London in Property Investment

Sep 25, 2023

Capitalising on the ‘Capital of the North’

In the world of property investment, making the right call can make all the difference. As the UK property market undergoes a transformation, London’s once shining star has lost its gleam, with soaring prices and shrinking rental gains. But fear not, because there’s a new contender in town, the ‘Capital of the North’. With its buy-to-let opportunities and affordability, Manchester city centre has been capturing the attention of savvy property investors. Let’s explore why investment property is the smart choice in this informative blog post.

Understanding the Shift

London has long been the epicenter of property investment in the UK. However, as affordability concerns arise, investors are turning their attention to other options. Enter Manchester: a city with a vibrant culture, thriving economy, and flourishing property market.

It offers great potential for both experienced and novice property investors, with rental yields almost double that of London. What factors are driving this remarkable shift?

According to Invest in Manchester the Capital of the North represents the largest city region economy outside London, with a gross value added (GVA) of £78.8 billion.

The Magnetic North: Manchester’s Appeal

Manchester’s Appeal

Manchester’s appeal as an investment destination lies in its unique combination of affordability, growth potential, and a thriving property industry. The city has experienced significant economic development, driven by extensive regeneration projects and infrastructure investments. This has led to a surge in demand for quality rental properties, especially from young professionals and students.

High Demand and Attractive Rental Yields

The high demand for rental property, including student investment property, contributes to Manchester’s attractive average rental yield. With a growing city centre population, this Northern city that should not be overlooked by investors. The city has impressive property values and house price growth, making it one of the UK’s leading cities for potential returns.

Growth in Manchester’s Property Industry

Manchester’s property industry is experiencing impressive growth, with Zoopla recording year-on-year growth across the Manchester market of over 8%. The rental price growth in Manchester is also noteworthy, with robust tenant demand ensuring a steady stream of rental income for investors. Manchester’s property industry is predicted to continue to grow, with a rental price growth of 3% in 2023.

Strong Prospects for Capital Appreciation

Furthermore, Manchester property investment presents robust prospects for capital appreciation, driven by the city’s continuous allure to both domestic and international investors. Manchester offers a prime opportunity for those seeking long-term growth and solid returns on their investment.

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Lower Property Prices, Higher Returns

One of the key advantages of investing in Manchester is its comparatively lower property prices compared to London. This affordability provides investors with an opportunity to enter the market at a more accessible price point, allowing for potentially higher returns on investment.

Lucrative Opportunities for Diversified Property Portfolio

This significant price difference presents lucrative opportunities for investors to build a diversified property portfolio in Manchester. By spreading their risk across multiple assets, they can maximise their return on investment while minimising potential risks.

Expanding Portfolio with Manchester’s Competitive Edge

For instance, the capital required to secure a single property in London could be utilised to purchase multiple assets in Manchester, expanding the investor’s portfolio and increasing potential rental income. The smaller initial investment, coupled with the city’s strong rental gains, ensures a quicker and more substantial return on investment. This competitive edge is what sets Manchester apart in the UK property market, making it a compelling choice for any discerning property investor.

Capital Gains and Rental Income Growth

Investing in Manchester property offers the potential for both capital gains and rental income growth. With its promising investment fundamentals and a favourable market outlook, Manchester remains an attractive destination for those looking to capitalise on the opportunities presented by the buy-to-let property sector.

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Students and Young Professionals in Manchester

Manchester is more than just a city; it’s a knowledge hub, housing renowned universities like the University of Manchester and Manchester Metropolitan University.

This large student population creates a high demand for conveniently located and quality accommodation, making it an attractive market for real estate investors. The cyclical nature of academic years offers predictability for investors. Investing in student accommodation not only taps into a lucrative market but also contributes to Manchester’s academic community.

Manchester is a city bursting with vitality, thanks to its young and vibrant population. The city is particularly attractive to students and young professionals, who are drawn to its thriving education sector and booming job market.

According to Statista, there were approximately 498,127 students attending schools in Greater Manchester in the 2022/23 academic year, compared to 493,050 in the previous year and 455,763 in 2015/16. This growing student population, which includes a significant number of international students, contributes to the city’s dynamic atmosphere and has a direct impact on the demand for rental properties.

pupils in mcr graph rental yields, property investment, property market, affordability, buy to let

A Hub of Innovation

Manchester is not only known for its historic industrial roots but also excels in the UK’s creative and digital industries. Manchester is recognised as one of Europe’s largest creative, digital and technology clusters and is home to a fast-growing £5 billion digital ecosystem.

The city boasts a thriving creative and digital scene, attracting young professionals and increasing the demand for rental properties. The dynamic workspaces and collaborative ethos of the creative sector, often found in city centre properties and trendy suburbs, provide a unique perspective for choosing investment properties in Manchester.

In addition, the existing 86,000-strong industry workforce is supplemented by a sustainable flow of graduates from the city region’s five universities. Almost 25,000 students are enrolled in creative, digital, and technology courses, along with industry-led apprenticeships and training programs. This ensures businesses have access to a wealth of specialist skills.

Furthermore, Manchester’s universities are producing skilled graduates in digital and creative industries, ensuring a future workforce that can contribute to this flourishing sector. This solidifies Manchester’s position as a hub of creativity, offering promising opportunities for real estate investors and reinforcing its reputation as an innovative investment hub.

View of the BBC building at Media City UK, investors

Investment Property in Manchester

Manchester’s Promising Property Market

Manchester’s property market is showing no signs of slowing down, particularly in the city centre. Investment properties in Manchester, especially in the city centre, offer promising potential for high returns. The combination of comparatively lower property prices and strong rental yields growth makes Manchester city centre a compelling choice for property investment.

The North West: UK’s Next Property Investment Hotspot

The north west, with Manchester as its flagship city, is poised to become the UK’s next property investment hotspot. The region’s buoyant economy, fueled by Manchester’s thriving sectors, robust job market, and increasing population, offers an encouraging landscape for property investment. With its strategic location, Manchester is a city that holds immense potential for both local and international investors.

Luxury City Centre Apartments: The Top Choice

Luxury city centre apartments are the top choice for Manchester property seekers. The most sought-after areas in the north west, such as Deansgate, Piccadilly, Ancoats, and Victoria, are home to premium new apartment developments. To secure your dream home in Manchester’s city centre, consider purchasing off-plan to stay ahead of the curve.

Manchester: A City Worth Considering

All these factors make Manchester a city worth considering for your next property investment. Not only does it offer the potential for capital growth and strong rental earnings, but also the chance to be a part of a city that is rapidly establishing itself as a leading global destination.

Skyscrapers in Modern Manchester rental yields, property investment, property market, affordability, buy to let, investors

Manchester’s Buy-to-Let Market: A Wealth of Opportunities

Manchester’s buy-to-let market is truly thriving, promising lucrative returns for savvy investors. With a youthful population, strong employment opportunities, and a robust student sector, the demand for rental accommodation is consistently high. As the city continues to experience population growth, this demand is only set to increase, making buy-to-let investments in Manchester a wise choice.

The city’s economic growth, coupled with significant investments in infrastructure and regeneration projects, is boosting property values. Manchester’s average property prices have demonstrated consistent growth over the years, outperforming many other UK cities.

Additionally, the rental yields in Manchester are very appealing to Manchester buy-to-let investors. Certain areas of the city such as Salford, Ancoats, and Northern Quarter offer particularly attractive yields, thanks to their popularity among young professionals and students.

Beyond the financial returns, investing in the Manchester’s buy-to-let market also provides the opportunity to contribute to a city that is at the forefront of the UK’s economic, cultural, and educational scene. It’s an invitation to be part of Manchester’s exciting growth story, making it an investment that’s truly rewarding in more ways than one.

Searching new house for purchase. Rental housing market. Magnifying glass near residential building. property investors

Job Growth: A Driving Factor for Manchester Property Investment

According to a report by the Greater Manchester Combined Authority, Greater Manchester is expected to see substantial job growth in the coming years. The city’s employment rate is set to grow at a faster pace than the national average, with projected growth in key sectors such as Professional, Scientific & Technical Activities, Information & Communication, and Health & Social Work.

This forecasted job growth not only bolsters the local economy but also impacts the Manchester property market. Increased job opportunities attract more individuals to the city, subsequently driving up the demand for rental properties. As a result, Manchester’s thriving job market contributes to higher rental gains and makes the city an appealing prospect for real estate investors. The job growth, coupled with the city’s affordability and high student population, further solidifies Manchester’s status as a prime location for property investment.

job growth graph

Manchester City Centre and Airport

Manchester Airport, the third busiest in the UK, is testament to the city’s status as a global hotspot. Its continuous expansion and development, including the £1 billion Manchester Airport Transformation Programme, are indicative of the city’s growth trajectory. As the North West’s main air transport hub, it plays a crucial part in attracting both domestic and international investors, boosting the demand for investment properties in the city.

New departures area at the new extension to Terminal Two at Manchester Airport rental yields, property investors, property market, affordability, buy to let, investors

Unmatched Transport Links

The council’s commitment to improving transport links, enhancing public spaces, and supporting the growth of local businesses has made Manchester city centre an attractive investment destination.

The city’s excellent transport links, including its well-connected airport and efficient public transportation system, further enhance its appeal as an investment hotspot.

City tram in the centre of Manchester, England

London’s Waning Lustre

London, once a major player in the property market, has seen its appeal diminish. The capital’s sky-high property prices have resulted in lower rental income for investors, making it less attractive for potential buyers. However, it’s worth noting that although properties in London are likely to appreciate in value over time, the initial cost can deter many investors, especially those seeking a more affordable entry point in the market.

Moreover, the pandemic has accelerated the rise of remote working, causing many London residents to reconsider their living arrangements. The convenience and flexibility of working from home have prompted individuals to explore alternative locations outside of the city, in search of a better work-life balance and lower living costs.

As a result, there is now less demand for rental properties in the capital, which in turn affects rental profits. This shift in preference has created an opportunity for other cities and regions to attract potential investors and tenants, offering competitive rental yields and a more affordable housing market.

In summary, although London’s property market faces challenges, it still holds long-term investment potential. However, the changing dynamics, including high property prices, remote working trends, and evolving preferences, have reshaped the landscape and opened up new opportunities for investors in other areas.

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How can I start investing in Manchester’s property market?

Considering investing in Manchester’s property industry? Choose Rothmore Property as your smart partner. As industry experts, we’ll guide you every step of the way for a successful investment journey.

Location plays a crucial role when selecting an investment property in Manchester. Desirable locations offer good public transport, education, shopping, and leisure facilities. Manchester’s property market has consistently grown over the last five, 10, and 20 years, with an impressive 378.96% increase in property prices between 2001 and 2021, the highest 20-year growth rate.

We recommend thorough research, understanding your investment objectives, and seeking professional advice. Additionally, visiting the city and exploring different neighborhoods will help you find the best fit for your investment strategy.

Seizing the Opportunity: Investing in Manchester

If you’re considering investing in UK property in 2023, Manchester presents compelling opportunities. The city’s robust economic growth, increasing population, and strong rental demand position the ‘Capital of the North’ to deliver strong returns for property investors.

In conclusion, while both London and Manchester possess unique strengths, Manchester emerges as the top choice when evaluating the current property investment landscape. Its blend of affordability, strong rental yields, and promising future growth make it an attractive option for property investors.

As Manchester experts, Rothmore Property comprehends the potential of this thriving market. With our in-depth knowledge and experience, we can assist you in navigating the Manchester property landscape and guiding you towards lucrative investment opportunities.

Remember, making informed investment decisions is crucial. Stay updated with the latest property market trends and news. After all, the world of property investment is dynamic, and the ‘next big thing’ could be just around the corner.

Manchester Property Investment

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DISCLAIMER

This guide is intended solely for informational purposes and should not be considered as investment advice. For those in search of financial guidance, it is advisable to consult with a financial advisor authorised by the FCA, to receive regulated advice tailored to your investment choices.

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