Alongside Bristol, Manchester is the UK’s highest growing city for real estate. Not only that, but a growing population of young professionals, three esteemed universities and significant regeneration have put Manchester firmly on the map of investors. Indeed, it’s often regarded as one of the best places for buy-to-let in the UK. These factors combined mean it has firmly established itself as an investment hotspot. But does investing now mean you’re late to the party, or does Manchester still offer good value for money?
That’s what we’re looking at in this article, which features a comprehensive review of the Manchester buy-to-let scene.
Finding buy-to-let locations with good yields
Manchester is one of the fastest-growing cities in the UK and Europe. The increased appeal makes the city a popular destination for new residents, with Manchester’s population growing by 9.7% since 2011.
The skyline has changed significantly over the years, with a plethora of new buildings erected to meet growing demand. It’s easy to see why investors find the city such a draw for buy-to-let. According to Molo’s data, the city offers gross yields of 5.7%, a figure that is generally considered attractive to investors.
For some landlords, Manchester is still a prime area for investment. Others, however, may look elsewhere to less-established locations – the new Manchester, if you will. But when stacking the city up against other areas in the UK, it still holds up well.
Why Manchester and not London?
Once viewed as a less popular choice for buy-to-let investors compared to London, Manchester has turned many heads in recent years. While London was the go-to city for high growth and yields, the landscape has shifted for a variety of reasons.
The key factor for any investor is the balance of supply and demand. Although London has always had a supply crunch with high demand, other cities now offer what many may deem as an attractive alternative, and Manchester leads the charge.
Affordability is one of the primary drivers. With average salaries in London £52,584 per year and average property prices soaring to £863,501.75 when you combine individual property types using Zoopla data, homeownership remains a distant dream for many.
While this would typically benefit the rental market, the barrier to entry is so high that many investors – especially first-time landlords – would be forgiven for looking elsewhere for buy-to-let investments.
Rental yield Map
- Explore the map
- Calculate expected yield based on your property value
- Calculate the avg. monthly rent and compare results with any location on the map
Reasons why Manchester can be a solid buy-to-let investment city
Boasting an economy that eclipses both Wales and Northern Ireland, Manchester is a cornerstone of the Northern Powerhouse – a collective of dynamic cities in Northern England that rivals London’s economic might.
By 2026, the city’s Gross Value Added (GVA) is projected to surge by £2 billion from its 2022 levels. Ernst & Young forecasts that Manchester will experience an annual growth rate of 2.5% from 2024 to 2026, outstripping the national average of 2.1% and ranking it the third-fastest growing UK city during that period.
Manchester’s robust sectors in professional services, science and technology, and finance are driving its upbeat economic prospects. From 2024 to 2026, the city is set to lead the UK in employment growth, with job numbers rising by 1.8% annually, compared to the national average of 1.3%.
As a leading Digital Tech City, Manchester is not just a national standout but also a frontrunner in Europe across various cutting-edge sectors. With a £5 billion tech ecosystem, Manchester is a powerhouse, hosting 10,000 digital and tech enterprises and employing 100,000 people. Its tech sector is expanding at a rate six times faster than the UK’s overall economy.
MediaCityUK plays a pivotal role in Manchester’s ascent, serving as a digital epicentre with a rich media heritage. It’s the operational base for giants like BBC, ITV, and Mediacom, making it one of Europe’s most expansive media and creative hubs.
Manchester excels in various domains like advertising, marketing, animation, gaming, and AR/VR. It’s also the birthplace of UK’s fastest-growing tech unicorns, including boohoo clothing, AO.com, and data-integration firm Matillion.
Manchester’s local culture is often celebrated for offering something for every taste and interest. The city is a mecca for sports with its iconic football clubs and the legendary Old Trafford cricket ground hosting top-tier sporting events. For history buffs and families, museums like the Science and Industry Museum and Manchester Museum offer enriching experiences.
Young adults and students will find themselves drawn to the city’s pulsating nightlife, especially at The Printworks, and the lively music scene. Canal Street serves as the hub for a flourishing LGBT nightlife, making the city inclusive and diverse.
Shopping aficionados aren’t left out either. Whether you’re in search of high-end brands at the Trafford Centre and Arndale, or keen to discover unique finds in the bohemian Northern Quarter, Manchester’s retail landscape is as diverse as it is exciting. Truly, Manchester is a cultural smorgasbord that leaves no one wanting.
All of these factors play a role in the city’s popularity and overall demand, especially with younger adults, a key demographic of renters.
The city continues to see regeneration projects come to life, with new ones announced regularly. The Mayfield development near Piccadilly Station progresses with a £400 million deal facilitating construction around the new Mayfield Park, featuring office spaces, a car park, and eventually over 1,500 homes and green spaces.
The long-awaited Factory International arts hub is set to open in the summer, promising to be a cultural cornerstone, drawing over a million visitors annually. Moston is also under the regeneration lens with plans for affordable housing and local centre redevelopment.
Additionally, a significant devolution deal aims to boost local control over transport, regeneration and culture, aligning with the broader urban renewal vision. These projects exemplify Manchester’s commitment to fostering economic growth, cultural enrichment and community improvement through strategic urban development.
Buy-to-let investors have the potential to enjoy solid yields in Manchester and its surrounding areas. It consistently offers higher yields than the national average of 4.75%. Again, according to Molo’s data, Manchester and Greater Manchester enjoy gross yields of 5.79% and 6.33% respectively. According to a report by global property advisor JLL, Manchester saw a rise of 19.6% in the 12 months to the end of June 2023, which was the highest among the ‘big six’ cities outside London.
Not only are the yields appealing, but Manchester properties also present an affordable investment. As of October 2023, the typical Manchester property is priced at £220,000. That’s a saving of over £60,000 compared to the UK average and a substantial amount less than London properties.
Areas to invest in Manchester
Manchester City Centre
Manchester city centre is a magnet for a wide demographic, including young professionals, students and workers from nearby regions. The abundance of retail, entertainment, and dining venues offers a vibrant lifestyle that many tenants seek. The property market here saw an average price of £243,025 over the last year, with flats being a major portion of sales at an average price of £239,3731. The average rental asking price for a property here is £1,225 per month.
Salford
Salford has been on the radar of investors due to its substantial regeneration in recent years, which has led to the construction of many new apartments. This regeneration, paired with excellent transport links, makes Salford a potentially attractive area for buy-to-let investments. Its Manchester city centre and the presence of the University of Salford contribute to a steady demand for rental properties, particularly from students and young professionals. Additionally, the ongoing development projects and improved infrastructure are likely to continue enhancing the area’s appeal. The average price for a property in Salford is £250,000, while the median rent is £1,400 per month.
Wythenshawe
This residential neighbourhood in Manchester enjoys proximity to the city centre, and boasts an abundance of green spaces and parks. It presents a favourable location for those considering investments in family-oriented rental properties, given its accessibility to reputable schools and a wealth of local amenities. The average property here costs £236,536, and homes achieve in the region of £1,200 per month.
Final thoughts: investing in Manchester’s buy-to-let scene
Whether Manchester is a good area for buy-to-let investment comes down to your requirements as a property investor. When compared to many other cities in the UK, however, it features several favourable aspects, including high yields, below average property prices and a robust economic climate.
Rental Yield Map
- Explore the map
- Calculate expected yield based on your property value
- Calculate the avg. monthly rent and compare results with any location on the map
