The Property Ombudsman

Why Manchester is still top of the buy to let wishlist

At Sequre, we have often highlighted why the north is prosperous for buy to let. Whilst London and other areas of the south may have looked ideal on paper several years ago, staggeringly high house prices proved to be a warning sign, and as a result we are now seeing a severe slowdown in the capital. Not only this, but yields have remained low which has meant that for buy to let investors, the city remains unaffordable and unprofitable.

Priced out of property in the south, investors were forced to look elsewhere for strong returns. Having always remained profitable, Manchester has consistently offered the perfect investment package – a major UK city with high rental demand, strong yields and growing house prices. Alongside this, the government launched the Northern Powerhouse initiative which allowed the spotlight firmly to shine on the north, with Manchester leading the way for development, new business start-ups and investment prospects.

As time has passed, the city has really come into its own. Regeneration projects around the city centre and just outside, in areas like Salford Quays and MediaCityUK, have created a wealth of employment opportunities, further cementing the city’s status as a buy to let hotspot. Take a look at some of the factors that have made Manchester such a desirable city for buy to let property:

  • Sustainable House Prices

The key to a successful property market is demand and healthy house price growth. While rising prices are positive news for those looking for capital growth on their investment, too much acceleration could be an indication that price falls are on the horizon. Manchester has shown consistency for several years, with sustainable house prices which have been rising steadily over time. In October, it was announced that Manchester remained the fastest growing city for property in the UK, with a 7.9%* price increase year on year, while still remaining largely affordable compared to many other major UK cities. This alone represents the high return that can be found in the city based on capital growth.

  • Rental Demographic

Tenant demand is vitally important in buy to let. Many novice investors make the mistake of purchasing an investment which is more suited to their personal needs rather than those of the tenants they are aiming to attract.

Throughout Manchester, young professionals aged 25-34 are the second largest demographic in terms of property dwellers, with approximately 109,000 living in the city**. Typically, this is the ideal age group for buy to let as young professionals often choose to rent due to the cosmopolitan lifestyle that city centre living provides.  As a city that also has a 51% graduate retention rate, the highest rate in the UK outside of London**, it also attracts a large level of employment to the city, boosting buy to let prospects further.

  • Development & Investment

High demand is the key reason why Manchester continues to attract investors. Developers and housebuilders are keen to take advantage of the buoyant market and have continued to ramp up their activity in an attempt to deliver the vast number of homes needed.

There are a number of huge projects and schemes either in the pipeline or already underway in Manchester, whether they be residential properties, new transport links or expanding the thriving hubs that make the city popular with tourists and locals alike. A few key developments include the new Trafford Park line as part of the Metrolink project, the newly restored Ordsall Chord as well as further plans to extend and expand MediaCityUK and Salford Quays. These huge schemes will help to transform the city and increase the demand for housing even further.  

From the rising house prices, stable economy and future prospects, Manchester is a city that will continue to see success for many years to come. The thriving property market has kept buy to let investors flooding into the city to take advantage. Arguably the most consistent and profitable city in the UK for buy to let property right now, Manchester is on track to remain as a key hotspot for property investment throughout 2018.

Are you looking to make your first property investment in the New Year? Or maybe looking to invest in Manchester for the first time? Call Sequre today for all the help and advice you need to make a safe and profitable investment. Our team of property professionals can guide you throughout the buy to let process. We work with banks, developers and housebuilders in order to get the best possible discounts on every property we source. To find out more, call us on 0800 011 2277.

 

Source:

*Hometrack UK Cities Report - October

**Savills Spotlight Report – Manchester 2017

Prime locations  |  High rental demand  |  Strong returns

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