Manchester is the 3rd biggest city in the UK, a large area with different property markets from low-value terraces to city centre apartments has great potential for property investment. Steady population growth has created strong demand by homeowners and tenants.
East and North Manchester has low price properties with great rental yields, therefore, good choice investors.
West Manchester offers mixed opportunities balancing Capital Growth and Rental Returns.
South Manchester offers best opportunities for solid HMO demand and highest potential-&historical- for capital growth.
Finding market rent for Manchester Properties
Why invest in Manchester? Manchester offers the best combination of the following factors.
1) Housing Demand and Supply
These key factors affect housing supply and demand in South Manchester.
South Manchester market has the highest quantity of properties with 3 bedrooms or more than other Manchester regions. 67 percent of its housing stock has 3 or more bedrooms offering more houses suitable for long term family residences for single let tenants. It also has the potential for conversion to a multi-let residence.
South Manchester has more Owner Occupied Housing Stock than other Manchester regions. 55.9% of region’s homes are Owner Occupied while 23.5% are private rented.
The local council Draft Core Strategy for new developments provides for just 5% of new homes because of the limited site. Restriction on future supply shall pressurize house prices.
The average size of classic ‘household’ in Manchester region is fast declining while overall population is increasing. This shall increase housing demand especially multi-lets.
2) House Prices
Housing prices are highest in Southern Manchester that has seen the largest growth in the last cycle.
There are still lower priced houses but high demand for houses will keep prices rising. Prices of terraces & semi detached properties are back to their peak in 2007.
3) The Local Economy
Some key points on the South Manchester Economy:
Economic predictions show Greater Manchester will weather economic recession better than rest of North West.
Southern Manchester sub-market has shown highest economic growth, key employment indicators, and stability than other Manchester regions.
A fund of £1.5 billion was approved for 15 Manchester transport schemes. These include an extension of the metro link on the two main lines across the south to link it with the city centre and the other areas.
Manchester Airport facilities will get £1bn investment over next decade.
Manchester can be summarized in 3 key points.
- Return of peak property price at many regions complicates investment solely for discount and yield. A good yield of 8-12+% can still be achieved by finding right properties at the right price.
- Increased population and housing demand in the region with limited building land has kept prices high even with low sales activity.
- Manchester is a worthwhile investment if looking for greater stability and capital growth. Close by Tameside and Salford also offer good alternatives.
Manchester might not be cheapest investment location but has strong potential for capital growth and long-term stability than entire North West. It still provides extremely buoyant rental demand and the combination of areas for any of your strategies.
If you prefer an all-rounder with lower selling prices than those at South Manchester but with strong potential for capital growth, why don’t you consider Chester?
If your aim is the maximum return on investment from the rental yields, look at Warrington, East, North or West Manchester.