Are you thinking about investing in property in Manchester? Our detailed Manchester property investment guide provides you with all the essential information you need to start your investment journey. Explore insider insights, expert advice, different investment strategies, and critical considerations. Our guide is organised into several sections, covering the following:
- Why Invest in Properties in Manchester?
- Understanding the Manchester Property Market
- Where to Find Investment Properties in Manchester
- Benefits and Risks of Investing in Manchester Property
- How to make money by investing in Manchester Property
Why Invest in Properties in Manchester?
Often referred to as the ‘London of the North’, Manchester is becoming the UK’s secondary financial hub. With the fastest-paced development outside of the UK’s capital, Manchester is setting trends in property development and is a very tempting prospect for property investors. The city’s population is increasing every day, with many young people seeking a more wallet-friendly alternative to London. According to the Office for National Statistics, the population of the city grew by 2.6% from 2021 to 2022, and these trends have been continuing so far in 2023.
In stark contrast to much of the UK, Manchester’s property market is poised for a continued upswing throughout 2023, albeit at a more moderate pace compared to the earlier years of exponential growth, as the UK market settles following a substantial surge. Manchester stands out as an enticing choice for property investors due to its robust market condition, boasting average house prices over 39% lower than those in London. While affordable property options are plentiful in Manchester, these prices are steadily ascending in line with the broader UK trend. Over the past 12 months, property prices have surged by a notable 9.3%, outpacing London’s 4.3% and the UK average of 8.1%. Despite this rapid growth, Manchester’s average house price remains significantly below the national average, making it an attractive opportunity for smart investors.
Exciting City Life
It doesn’t just rain all the time! Manchester consistently claims the top spot in numerous ‘best places to live in the UK’ accolades, and the reasons behind this accolade are abundantly clear. The city boasts exceptional nightlife, a diverse and lively cultural scene, and a robust employment landscape. Whether you’re seeking trendy inner-city abodes or comfortable suburban family residences, Manchester provides an extensive array of options for prospective residents. Students flock to Manchester for the chance to study at the prestigious Manchester University, Manchester Metropolitan University, RNCM and Salford University, as well as for the iconic music scene and amazing nightlife.
Manchester’s key industries, including manufacturing, business, finance, life sciences, healthcare, digital, and creative sectors, collectively generate an impressive annual wealth surpassing £4 billion. Notably, Media City, presently housing the prestigious BBC and ITV television studios, serves as a focal point for numerous businesses establishing their presence in the city, further enhancing rental property prospects.
Understanding the Manchester Property Investment Market
Manchester is a hotspot for property investors, but make sure you do plenty of research before joining them. Look at recent analysis of the housing market in Manchester and consult with experts in the field before investing.
Manchester, bolstered by the nation’s highest job creation levels, a remarkable 50% graduate retention rate, and a recent £1 billion investment injection from the UK Government, emerges as a city ascending to new heights. Notably, the city has witnessed remarkable spikes in property values, with HM Land Registry reporting a substantial surge in house prices in 2022, translating to a staggering £20,000+ increase. According to the JLL Cities Index for Manchester, there has been an impressive 22% growth in rental yields for new developments in the city centre in the year leading up to December 2022, with no signs of this momentum abating.
The Residential Forecast by JLL anticipates a 6% rental rate hike in Manchester for 2023, followed by an exceptional 21.6% surge in the 2023-27 period—an astounding 5% higher than the national average. This data underscores the lucrative potential for property investors eyeing Manchester’s thriving property market.
How to find Investment Properties in Manchester
Discovering the ideal investment properties in Manchester needs some forward planning on your part as well as some insider advice. Follow these crucial steps to navigate your path to finding investment opportunities within the city of Manchester. As always, making local connections, figuring out what your investment goals are, and doing research on the city will help set you up for success.
Define Your Investment Goals
The first thing you need to do is figure out what your investment goals are. Are you looking for properties that will bring in rental income, or appreciate in value over time? Will you have money set aside to invest in renovation, if it’s required? Are you relying on a mortgage to invest in property, or do you have cash ready to invest? Thinking ahead about these things will help you find the right properties to invest in and allow you to make the best choices.
Cultivate Useful Connections
Get to know the players in the Manchester real estate market. They will know about hidden gems for investment and any risky properties to steer clear of. Building useful connections in the local scene will let you in on insider information and even where to find properties that aren’t advertised on the standard channels.
Know Where To Look
Leverage online platforms, property websites, and real estate portals to hunt for investment properties in Manchester. These convenient platforms empower you to refine your search with filters such as price range, property type, and location. Additionally, you can delve into property listings, browse through images, and access essential property information, all with just a few clicks.
Do Your Research
Doing research into the local property market and any happenings in the local area will stand you in good stead as a potential investor. We have selected some up-and-coming areas for Manchester property investment, but always remember to take the time to do some independent research.
Ancoats in central Manchester is a thriving and rapidly transforming area, once an industrial hub, now a sought-after trendy neighbourhood. Recognized as the 20th ‘coolest place to live in the world’ by Time Out, its regeneration has significantly boosted the local property market. Ancoats is easily navigable on foot, offers excellent bars and restaurants, and was previously named one of the best places to live by The Times in 2019. Over the past two decades, property prices here have surged by nearly 195%, making it a prime location for capital growth. With an average house price of £271,805 and an average rental yield of 5%, potential investors could do very well from properties in Ancoats.
New Islington was named one of the Best Places to Live in the UK by the Sunday Times, and it’s easy to see why. This area seamlessly blends cutting-edge design with contemporary architecture while preserving its industrial heritage through ongoing regeneration efforts. New Islington offers an enticing mix of green, open spaces for outdoor enjoyment, all within easy reach of the city centre, just a few minutes walk away. With a wealth of new homes and amenities, along with a serene marina providing tranquil city living, New Islington presents a compelling investment opportunity. The area’s recent regeneration has propelled its popularity and investment potential, solidifying its status as one of the most desirable places in the UK to live and work.
Deansgate in Manchester stands out as one of the most coveted regions for both living and investment. This vibrant area boasts landmarks like the imposing Hilton Hotel, the magnificent John Rylands Library, and the popular Deansgate Locks, solidifying its status as one of the city’s premier property hubs.
Deansgate offers exceptional transportation links, a thriving scene of bars and restaurants, and stunning architectural gems that have fueled a surge in tenant demand. For investors seeking buy-to-let properties in Manchester, Deansgate offers promising rental yields averaging around 6%, providing an excellent opportunity to capitalise on high demand and secure substantial returns on property investments.
Salford Quays, once plagued by urban decay in the 1970s and 80s, has blossomed into a thriving commercial and residential district. It’s a gem often overlooked by property investors who are drawn to the vibrant heart of Manchester. However, underestimating this area would be a mistake.
In the past, Salford Quays served as the site of Manchester Docks, but it has since evolved into one of the UK’s earliest and most extensive urban regeneration projects, initiated after the closure of the dockyards in 1982. Today, it proudly showcases iconic landmarks such as The Lowry, The Imperial War Museum, Manchester United’s Old Trafford football ground, and the thriving MediaCityUK, all of which contribute to a booming economy and an exceptional property market.
Salford Quays presents compelling investment opportunities with an average house price of £253,567 and an impressive average rental yield of 6.2%.
The Northern Quarter is renowned for its vibrant music and fashion scenes and is a thriving hub for those seeking a trendy and lively lifestyle. It naturally attracts young professionals and students, resulting in a diverse range of quirky bars, clubs, and cafes. Despite its seemingly weathered exterior, The Northern Quarter hides a treasure trove of modern apartments, some of which rank among the most sought-after properties in Manchester.
The Northern Quarter also boasts exciting employment prospects, thanks to its burgeoning finance sector and creative industries, offering ample opportunities for students, graduates, and residents to work in this thriving area. Amazon has a corporate office in the imposing Hanover Building which employs 600 people. Situated between Victoria Station and Shudehill, this presents enticing career prospects for those in the vicinity.
Regarding property prices, this area has demonstrated robust performance in the past year. Zoopla reports the current average property value as £193,065.
Benefits and Risks to Manchester Property Investment
Manchester has a lot going for it when it comes to property investment. You’ve got affordable opportunities, ongoing regeneration projects, a population that just keeps on growing, and that vibrant city culture that draws in young professionals in droves. Although, do remember that there are still some risks lurking in the Manchester property market for unlucky investors. Here are some of the potential benefits and risks you should keep in mind when thinking about Manchester property investment.
Booming Student Population
In the last academic year, Manchester had a student population of over 120,000. That’s a lot of potential revenue to be made from investing in student properties. While there is a lot of turnover in the student housing market, there will always be students who are looking for places to live while they study in Manchester.
High Rental Yields
When it comes to renting out property in Manchester, the average rental yields can rise as high as 8%. For savvy investors eyeing a lucrative rental income, these high rental yields are nothing short of essential. This means that, on average, you can expect a significant return on your investment in the form of rental income. In other words, Manchester’s property market is primed for those who are keen on generating attractive rental earnings from their investments.
Good Transport Links
With a top-quality rail and motorway network, people in Manchester can easily travel to nearby cities like Liverpool and Leeds in under an hour. Even major cities like London, Glasgow, and Cardiff are well within reach, with a train ride to London taking about 127 minutes. The new HS2 expansion to Manchester Piccadilly is set to cut travel times even further, with a London commute that’s just 67 minutes and Birmingham in only 40 minutes. Manchester’s city centre also boasts a convenient tram system, making it easy to travel around the city.
House prices are rising rapidly
House prices in Manchester are on a swift upward trajectory, and it’s a situation that carries both advantages and disadvantages. On the one hand, this surge is undeniably good news for investors. As property values climb, the potential for robust returns on investment becomes increasingly promising. However, the flip side of this coin is the diminishing likelihood of securing a lucrative deal with each passing moment. The rapid rise in house prices means that opportunities to acquire properties at bargain rates are dwindling.
How to make money by investing in Manchester Property
As mentioned previously, Manchester property prices are rising rapidly. We aren’t going to tell you to skip out on research and buy up property in Manchester without doing your due diligence, but don’t drag your feet either, or you could miss out on some great investment opportunities.
Do Your Research
Diving headfirst into an unfamiliar property market can be a risky venture. It’s crucial to roll up your sleeves and thoroughly grasp the nuances of Manchester’s property landscape before making any investment decisions. Consider making multiple visits to different neighbourhoods, and seek guidance from seasoned experts in the field. Remember, research isn’t a one-off task; the property scene is in constant flux. Staying well-informed about these shifts and developments is absolutely essential for a fruitful investment journey in the city.
Set a Budget – And Stick to it
It’s surprisingly easy to get caught up in the allure of investment opportunities, and before you know it, your entire budget can vanish. Unanticipated expenses have a way of sneaking up on you, so it’s a prudent move to set aside an emergency fund. Always bear in mind that property investment is more like a marathon than a sprint. It might be a while before you start reaping substantial returns. So, stay dedicated and patient – your efforts will pay off in due course.
Stay Positive and Learn From Mistakes
There will always be setbacks along the way, as with any investment journey, but don’t get discouraged. If something happens that is less than ideal, treat it as a valuable learning experience, and consider yourself armed against future failures. After all, the most important thing on your Manchester property investment journey is to retain that all-important positive mindset, surround yourself with like-minded successful people, and focus on your wins rather than any losses.