Why is it a buy-to-let hotspot?
Looking for healthy yields for your buy-to-let investment? If the answer is yes (and let’s face it, why wouldn’t it be?), Manchester is in the top bracket of cities in the UK for investment. Those with buy-to-let properties in the ‘Rainy City’ can currently expect favourable yields of around 5.8 per cent.
But what else goes into the makeup of Manchester? How has the city become a hotspot for those looking to invest in buy-to-let properties?
If you’re looking for a good deal — especially if you’re used to areas with expensive housing prices — Manchester appeals instantly. Those looking to invest can expect to pay an average of £235,000, a figure which is considerably lower than London’s average house price of £475,000.
Most outside investors will likely find themselves drawn to the city centre, where one-bedroom apartments go on the market for around £150,000.
With an expected average monthly rent of £1,145, Manchester offers healthy yields for investors and sees plenty of demand. Rental property currently constitutes for two-thirds of the entire housing stock in the city.
So why is there such a high demand for rental accommodation? 18 years ago, Manchester City Centre housed around 10,000 people. Today, there are more than 70,000 living in the centre. One of the reasons for the boom is the £1bn invested by the government as part of the Northern Powerhouse initiative.
In the whole of the UK, only London has more new businesses moving to the city than Manchester. Over the years, many tech and media companies — including the BBC — have set up shop in Manchester.
As a result, the need for professionals has grown, with most of them preferring to live within close proximity to their jobs. A cluster of these people includes young professionals who choose to live in the modern residential developments that embody the city life.
On top of a thriving job scene, Manchester is home to a large number of students, many of which come from overseas. There are more than 85,000 students in the city, and it has the second highest retention rates behind London.
With four universities in the Greater Manchester region, there is no shortage of demand. And with lower rental prices than in London, many students can afford properties in the higher end of the market, including accommodation in the heart of the city.
While job availability and quality of higher education play a huge factor in demand for accommodation, a city still needs to be able to hold its own in other aspects, such as entertainment.
Fortunately, Manchester has a reputation for being a vibrant metropolis. Whether it’s boutique shopping in the Northern Quarter, a selection of top-quality eateries that include Michelin-star restaurants, a thriving art scene, its musical roots that are still just as important today, or immersing yourself in local museums, Manchester is at the forefront of culture in the UK.
Where to invest
The Northern Quarter
The Northern Quarter is in the heart of the city centre and is one of Manchester’s trendiest areas. A vibrant art scene features many galleries, while plenty of independent boutique shops line the area. Many professionals working in the media industry like to call the Northern Quarter their home.
Scenic waterways, cobbled streets and a fusion of the old and new provide Castlefield with plenty of charm. Declared England’s first Urban Heritage Site in 1992, it’s one of the city’s oldest sections. The area is a favourite with professionals who want easy access to the city centre.
One of the more residential areas in Manchester, Didsbury has proven to be popular with families looking to lay down roots. Those that choose to rent in this area do so with the intention of staying for the long term. You will mostly find period properties in Didsbury.
Investing in Manchester
Property prices in Manchester have increased by 24 per cent over the last 12 years. Not only are the yields appealing, but the potential for long-term capital growth is also enticing. A thriving professional scene and high student population also add to appeal of Manchester. It has become a viable alternative to those that wish to see their money go a little further than it will in London.