When it comes to property investment, there are a few hotspots across the UK right now. Of course, London is one…but the capital is likely to always be a good investment due to its popularity and cosmopolitan nature. In 2019, it seems as though the north will receive lots of attention too. In particular Newcastle, Liverpool, and, our topic for today, Manchester.
First, we appreciate that some of you will be motivated by the economic aspects of an area which is why we’re starting with the financial rewards. In terms of rental yields, this is now up to 10% which is more reliable than most investment opportunities across the UK. However, it gets better because the rise in house prices is only set to continue in the coming months and years. By 2020, experts believe house prices will increase by nearly 23%.
If you choose a buy-to-let investment, the high rental yields will ensure you see a positive return in no time.
Second, the infrastructure across the city is going through some of the biggest improvements in decades. For example, Manchester Airport was recently boosted with a £1 billion budget expansion. In the next few years, Terminal Two will be expanded by 150%, a new multi-storey car park will make it more accessible, and two new security halls will be equipped with some of the industry’s leading technology.
In 2018, Manchester Airport opened brand-new routes to Ukraine, Israel, Mumbai, and Addis Ababa. As UK’s second-largest city expands, more and more routes are expected to open.
Away from the airport, the production of the high-speed train line between London and Manchester, HS2, will also make the capital more accessible for those who settle in the city.
Why invest in Manchester? Well, both of these improvements to the city’s infrastructure will make it a more popular destination. Not only will people come in from abroad and need hotel accommodation, students will also be attracted to Manchester as a university city. For those in the south who were once reluctant to travel too far from home, they can move to and from Manchester faster than ever and this boosts demand for student accommodation.
Big Company Presence
Next, Manchester is quickly becoming a hub of activity for some of the largest companies in the UK. According to the FTSE 100, over 80% of companies in the list have a presence in Manchester and this shows the growth in the local economy. Not only is it UK companies setting up in the city, some of the largest brands from around the planet have decided to do the same. If this continues, the potential for Manchester is endless.
In Manchester, many different industries are booming including media and technology, financial services, and engineering. As this continues, workers will need somewhere to live, and investors will be rewarded. Between 2002 and 2015, job growth averaged nearly 85% which is incredibly impressive.
Increasing Demand For All Properties
Although we hinted at the increased demand for all properties as we asked, ‘why invest in Manchester?’, in a previous section, we feel it deserves an explanation of its own. Starting with students, the growing industries above and improved infrastructure have made Manchester a popular city. Today, their graduate retention rate sits at 50% which means that half of all students who attend university in Manchester choose to use their skills in the city after graduating; this can only be a positive step for the local economy.
What about buy-to-let investments? As the population of Greater Manchester creeps over the 2.75 million mark, the need for quality housing has never been higher. In fact, some say that the average home is now rented within just 72 hours of entering the market. If this doesn’t show the growing demand, we don’t know what does.
Plenty Of Opportunities
As the city goes through this continued evolution, it’s thought that around 55,000 new properties will be available by the end of 2027. Despite all the excitement surrounding the city, this means that investment opportunities will be affordable. Whereas many major cities have very few opportunities, and the ‘supply and demand’ model pushes the prices higher, Manchester is in a unique position.
Compared to other cities around the UK, Manchester has low entry costs, and this is great news for investors. In 2017, the average rent for studio apartments grew by 5% while en-suite bedrooms for students experienced a 3% growth.
We should also note that Manchester is unique in that it offers concentrated growth. In Manchester, there’s no doubt where investors should be looking for student accommodation. In the M14 postcode, there are two different university campuses. Elsewhere, the M19 postcode offers a brilliant average yield of 8.6%; this includes Heaton Mersey, Levenshulme, Heaton Chapel, Reddish, and Burnage.
Finally, we’ve spoken lots about the economic side of Manchester, about the big companies that have settled there, and the opportunities that now exist for hotel rooms, buy-to-let investments, and student accommodation investments. However, we haven’t yet spoken of the city itself.
We would be doing Manchester a disservice to ignore the following;
- Science and Industry Museum
- The two football teams and famous European Stadiums (Etihad Stadium and Old Trafford)
- The National Football Museum
- The Lowry
- Manchester Art Gallery
- The John Rylands Library
- IWM North
- Manchester Cathedral
- Whitworth Art Gallery
- Heaton Park
- Fletcher Moss Botanical Garden
In truth, we could continue and double the size of this article, but the message would still be the same; there’s plenty to see and do in the city which means it will ALWAYS have organic growth.
Why invest in Manchester? At this point, we’ve hopefully given some insight into why this city is popular for investors (and why this will continue in the near future). If you have questions or want more information, feel free to get in touch with us here at Property Invest UK!