Property Investment Manchester – Everything You Need to Know

Thanks to low property prices and high rental values, Manchester’s property market is quickly becoming the perfect place for property investors to spend their cash in 2023

In January 2022, average Manchester property prices were valued at just £211,773 by the Land Registry. This is over £55,000 cheaper than the UK average and is more affordable than places like Leeds, London, and Edinburgh.

The most recent Land Registry data from February 2023 shows an average Manchester house price of £231,110, which is still below the average in many UK cities, while showing a growth of 9.13%.

This affordability is emphasised when you compare central city-centre locations.

The average Manchester city centre property can be purchased for around £279,028 as of March 2023, according to Zoopla data on recent listings in the area.

For comparison, Central London house prices are around 591% higher than property to let in Manchester.

In context, that means you could buy nearly six Manchester city centre properties for the price of just one in Central London.  Investing in Manchester is incredibly affordable considering the popularity, size and growth of the city.

Significantly for property investors targeting long-term house price growth, average property prices in Manchester are soaring at an incredible speed.

In the last five years, the average Manchester property has increased by a whopping 36.31%, with a 20-year growth rate recorded of almost 390% – the highest out of every major UK city.

Savills expects that Manchester, along with the rest of the North-West, will see a further growth of 11.7% by 2027, so Manchester property investment will benefit more than other cities it could compare to.

These growth levels mean there’s a considerable opportunity for capital appreciation in Manchester, giving even more reason to invest in Manchester buy-to-let.

This suggests a lot of promise for 2023 and beyond with property prices after Brexit in Manchester.

Manchester Rental Market Data

Alongside the booming Manchester property market, Manchester’s rental sector is also seeing huge growth.

According to Home.co.uk data from April 2023, the average rental income per month in Manchester lies at around £1,498.

This is £314 higher than the UK average, despite average UK property prices being 24.61% more expensive than in Manchester property investment.

Due to massive rental returns and low prices, investment properties in Manchester can generate average gross rental yields of 7.78% – higher than the average rental yield in Birmingham, Leeds, London, and Newcastle!

These statistics are only going to get better, too. A recent report from JLL has predicted a rental price growth in Manchester of 3% in 2023 – higher than the UK average (2.5%). As well as this, there’s a predicted 5-year growth of 21.6%, a huge rise.

As such, there’s likely never been a better time to invest in Manchester buy-to-let property.

Manchester Rental Market Undersupply

A big reason behind the massive growth seen in Manchester’s property market is down to a huge undersupply of properties in the city.

Across the UK, tenant demand has hit a record high, with a 2022 report from Rightmove finding that the number of buyers enquiring about UK homes is 15% higher than at the same time last year.

This demand is even higher in Manchester. A study from Zoopla in 2020 found that the ratio between supply and demand in Manchester is around 1:5. This means for every single property, five people want a home.

Manchester Evening News also reported that rental demand in Greater Manchester rose by 20% annually from 2021 to 2022, showing that there is continued rental demand in the area.

These figures continued into 2021, with Manchester rental market demand so high that property supply reached its lowest-ever level, according to Urbanbubble.

It’s not surprising that this is the case when you look at how much the Manchester population has grown over the last two decades.

According to the Manchester Evening News, the Greater Manchester population increased by 7.7% between 2006 and 2016 – double that of the UK average.

This growth was higher in the city of Manchester, with the population now 27.8% higher than 30 years ago.

More people than ever need a home in Manchester, which is good news for buyers looking at tenanted property for sale near Manchester. Not only can you expect consistent rental demand, but long-term capital growth is also huge.

There are currently over half a million people living in the city of Manchester, with a large part falling under the ‘generation rent’ age group.

Based on data collected by the Office of National Statistics in 2021, around 37% of Manchester’s population is aged 18-34.

In fact, the average age of a person living in Manchester is around 37, which is incredibly young, and is a big factor behind why Manchester buy-to-let is such an attractive investment strategy.

Since young people are statistically more likely to rent – with one in three millennials said to never own a home of their own – a high population of young people can dramatically boost the demand for a rental property in Manchester.

This is great news for investors looking to buy an investment property in Manchester, and a young population also opens the door to buyers making a student property investment.

The population is predicted to increase even further, too, with estimations that the population in Manchester will increase by 56,000 by 2034.

According to Cushman & Wakefield, job opportunities are a driving factor for this growth.

It’s anticipated there will be 3,100 new jobs per year, many of which will be high-salary jobs in the city centre.  This will help draw in young professionals seeking work, a key demographic in the Manchester buy-to-let market.

Thousands of investors are choosing to invest in Manchester property.

But why is property to let in Manchester such a popular option? Why do investors choose the North West city over the likes of London and Birmingham?

Well, property investment in Manchester isn’t just an excellent choice when factoring in rental yields, house prices, and rental demand, but the city also offers world-class infrastructure, regeneration, employment opportunities, and economic growth.

For these reasons, you can find some top properties to buy in Manchester. By finding a Manchester investment property for sale, you can set yourself up for huge success.

Manchester’s Infrastructure and Transport

Voted ‘the best city to live in the UK’ on numerous occasions, Manchester boasts excellent transport links and connectivity for its rapidly rising workforce.

The world-class transport links in Manchester make it easy for residents to commute between other key cities in the UK.

The city’s high-quality rail network and motorway network means that those living in Manchester can easily travel to nearby cities like Liverpool and Leeds in less than one hour.

Other major cities like London, Glasgow and Cardiff are also easy to reach, with a train ride to the capital taking around 127 minutes.

Notably, the new HS2 expansion to Manchester Piccadilly will reduce travel time considerably.

It will halve travel to London to 67 minutes and reduce travel time to Birmingham from 88 minutes to just 40.

This is great for the city’s young professional crowd of renters, increasing the appeal of living in Manchester and boosting opportunities for Manchester investment.

Along with transport links to other cities, Manchester city centre also boasts a sophisticated tram system.

The Manchester tram system allows residents and tourists to travel around the city centre with ease and reach other parts of the city like Altrincham, Bury, East Didsbury, Ashton-under-Lyne, Eccles, Rochdale and Manchester Airport. If you are looking for the best way to invest 100K, investing in real estate in Manchester could be for you!

Manchester’s Amenities

You may be asking “Is Manchester a good place to live?” before you decide to invest in the area.

And the simple but effective answer is: Yes.

Manchester is a great UK city to live in, offering residents an excellent quality of life.

With a famous shopping scene, eclectic nightlife, an endless range of leisure attractions and plenty of restaurants and bars, Manchester is one of the UK’s biggest tourist spots.

Floods of people head to this Northern city each year for music events like the Warehouse Project or Parklife Festival, amongst cultural events such as the Manchester International Festival.

Manchester’s thriving business scene also regularly attracts high numbers of visitors.  Trade shows, exhibitions and conferences are commonly held at Event City and other spots in the Manchester area.

Manchester is constantly evolving, with ongoing regeneration projects transforming the city and pumping millions into the economy.

Major projects that are set to transform the city include:

• The Northern Powerhouse initiative
• St Johns development
• HS2 Expansion of Manchester Piccadilly
• Ancoats and New Islington Regeneration
• Greengate Manchester

Regeneration in Manchester has helped provide a huge economic boost to the region and create more diverse options for investment property in Manchester.

Property investment in Manchester is thriving partially because of regeneration efforts, as new build buy-to-let properties are constructed as part of these schemes.

But these aren’t the only major projects, past and present, that have transformed the region.

The city’s three major projects have been Spinningfields, NOMA, and MediaCityUK.

In the following section, we will take a deep dive into these three projects to explore the impact they have had on the city.

Spinningfields

Located between Salford and the city centre lies Spinningfields, a regeneration project that has been named Manchester’s answer to London’s Canary Wharf.

First introduced during the early 2000s, Spinningfields saw £1.5 billion go into creating around 430,000 square meters of residential, commercial, and retail space, along with being home to several banks, including Barclaycard and HSBC.

For property investment, Manchester areas that are up and coming with business opportunities are key, which is why Spinningfields is a great Manchester buy-to-let location.

The Spinningfields Manchester postcode of M3 offers some incredibly sizeable yields, with prices starting from around £246,639 and massive returns of 7.30%.

If you want to invest in the future, investing in the Spinningfields Manchester postcode of M3 could be worth your while.

NOMA

A 20-acre mixed-use development that adjoins Victoria Station to the city centre, NOMA is one of the city’s most extensive regeneration zones.

The project involves creating four million square feet of retail, residential, office, hotel, and leisure space.

Backed by the Co-operative Group and driven by a vision of sustainability and urban regeneration, the NOMA scheme has been created to attract more companies to the Manchester area and encourage more investment.

MediaCityUK

At the forefront of Salford’s newfound business focus is MediaCityUK – a thriving business network ranging from major corporations to start-ups and a top area for purchasing buy-to-let property in Manchester.

Once a run-down docklands, MediaCityUK has created a booming investment property Manchester market with plenty of opportunities to cater to local tenant demand.

Ever since the first phase of construction began back in 2007, MediaCityUK has gradually welcomed several organisations like ITV, BBC, RCCIL and BUPA.

Thanks to the significance of MediaCityUK as a top business destination, those looking to invest in buy-to-let in Manchester are naturally drawn to this Salford area, taking full advantage of the opportunities available.

If you want to learn more about Manchester’s regeneration, or regeneration in other UK cities, be sure to check out the UK regeneration guide.