In recent years there has been a noticeable shift from investors who were traditionally attached to London to some of the regional cities throughout the UK. As a result, Manchester is one of the leading cities investors are now looking at as an alternative, especially for buy-to-let.
There are an endless amount of reasons why Manchester became an investment magnet but some of the most influential factors are the following:
- Outside of London, Manchester International Airport is the UK’s largest flying to the likes of Dubai, New York and Hong Kong with over 27 Million passengers in 2017.
- The University of Manchester is the largest in the UK in terms of student numbers.
- Manchester is the flagship city for the UK’s Northern Powerhouse regeneration scheme which will see millions invested, ultimately benefiting the Greater Manchester population of circa 2.7 million.
- Finally, with the likes of MediaCityUK corporate investment into the city has drastically increased – Amazon, Adidas, Kellogg’s, BBC, ITV all now have a presence in the city.
With strong investment fundamentals such as major employers, strong transport links, structural undersupply, world-renowned educational institutions, plenty of global tourists and major government investment, it’s clear Manchester has the essential aspects that investors look for. Combining these factors with moderate entry-level and potentially high-yielding properties has caused a significant demand for Manchester stock from all around the world.
Recent Performance Data
Since the referendum in 2016, the year-on-year capital growth for Manchester has been in the region of 6 to 8%. Hometrack part of the Zoopla Group provides monthly insights into property price inflation, of which Manchester regularly features in the top 3 cities. At the time of writing, analysing the November 2018 report the average wide UK city house price inflation was +2.6%, London was -0.1% yet Manchester was joint first at +6.6% across the UK’s largest 20 cities.
Experts within the investment industry are naming Manchester as the number 1 UK residential investment location based on numerous factors. JLL mentioned in their Northern England Residential Forecast for 2018 that Manchester city centre 2-bed properties increased on average from £230,000 to £250,000 in 2017 and pricing of new build property has risen from an average of £250 psf to £330 psf over the past 3 years. It’s clear from basic online research that the data backs up the reputation Manchester has now gained.
Market Forecast
Whilst property investments of course should be considered on an individual basis, professional investors want to go into a market that provides a stable rental income but also has the potential to further increase based on industry-leading research and market forecasts.
JLL predict that property values in Manchester will increase by 22.8% in 2022, equally as important, rental prices are also meant to increase by 17.6%. This genuinely does represent a strong opportunity for investors to purchase quality city centre stock in the current market, despite the negative headlines Brexit has caused.
Hopefully, this provides a useful insight into how Manchester has performed so well over recent years and is predicted to do so in the future. Please get in touch via [email protected] with any questions or if you would like to discuss your investment strategy and review options.
