Key Highlights

As London and other parts of the south of the UK have been almost over-exhausted with regeneration and investment plans, investors are looking further afield in the UK into untapped or less-crowded markets. One such location is the North West of the UK. 

This area is densely populated and heavily industrialised. Regeneration plans are happening across all the areas. It is home to several cities, some of which are considered “jewels of the north” like Liverpool and Manchester. Other cities include Chester, Lancaster, and Preston, which while small, are still enjoying population and housing price increases.

Here’s why you should invest in the North West.

A (Mostly) Untapped Market

While not as populous as London or Birmingham, the cities in the North West are large in their own right and continue to grow. Savills has predicted that this region will expect almost 30% growth in prices over the next five years.

Many cities are undergoing regeneration, but investors often overlook the benefits and choose wealthier cities like London and Brighton instead. These regeneration plans are slated to bring more people and more finance into the cities’ economies, rejuvenating the area. 

Manchester is undergoing regeneration in the city center and surrounding areas, with many properties available for purchase. One such development is Manchester’s Red Bank area, which should see the inception of over 1,500 new homes before the end of the next decade.

Lower Property Prices

Property in the North West is often a lower price than in the south, especially in London and the South East. According to Rightmove data, the average flat price in London was £567,415 in the past year. Terraced properties went for an average of £833,439 in the same period.

Conversely, Manchester and Liverpool, as well as other parts of the North West, are far cheaper in comparison. The average cost of a property in Manchester was £294,102 in the last 12 months (Rightmove). Semi-detached properties went for an average of £325,569. Terraced properties sold for an average of £241,070, and flats netted an average of £193,890.

Liverpool carries on this trend, being even cheaper than Manchester on average. The average stood at £211,883 over the last year. Terraced houses sold for £152,527. Semi-detached properties sold for an average of £235,405. On average, the price for flats was £136,619.

The savvy investor has everything to gain from these low prices. Buying early allows properties to increase in value when rented out for profit. This brings us to our next point: yields.

High Returns

London rentals tend to average 5%. While this is great and often very stable (investors should always look for yields of between 5 – 8%), higher yields can be found in other parts of the country, including the North West. This is owing to the lower property prices yet demand for high-quality rentals. This demand has become more acute as more and more working professionals, national and international students, and young families look for rental properties that are tastefully designed, suited for renting, and of good quality.

Rental yields in Manchester and Liverpool can vary. Yields do not go below 5% but often hit 8% and beyond. House prices tend to appreciate quite quickly, particularly in Manchester as it becomes bigger and more densely populated.

In Liverpool, the average gross rental yield for Liverpool buy-to-let properties is around 6.1%. Rental yields for Manchester vary between between 6-7%. This shows that the North West can offer investors strong rental income.

Growing Population

The North West has been seeing a surge in population growth in recent years, namely in some of the larger cities. Let’s dive a little deeper into the statistics.

Manchester

Manchester, often considered the UK’s second city and the “capital of the north”, has seen a staggering increase of 7.3% in its population from 2011 to 2021. This figure has only kept on rising.

The population of the city now stands at over 560,000. It has a population density of 12,210 people living per square mile, which works out to 4,716 people per square kilometre. It is the 9th densest city in the UK. These figures alone make Manchester an appealing prospect for property investors, but why are so many people relocating to the city?

The city has long been revered for its culture and industrialisation. It has always been at the forefront of innovation, from the Victorian era to now. Nowadays, it’s traded its industrialised focus for more tech and finance businesses.

It is considered the northern powerhouse, and has quickly established itself as the northern finance capital. It is home to big brand names like United Utilities, Adidas, JD Sports, The Hut Group, and much more.

Young professionals have also been relocating to the city in huge numbers to work at these companies. These workers are either new to the city or were former students, choosing to remain in the city after graduation to find work. Over half of the city’s graduates choose to stay to work and live in the city, in comparison with 29% retention in Leeds and the other large northwest city of Liverpool, which has a 31% retention rate.

Thousands of students come to the city each year to study at some of the most prestigious universities the UK has to offer. One standout school is the University of Manchester, which frequently tops Top 20 boards in a range of faculties.

Manchester Metropolitan University, the Royal Northern College of Music, the University of Salford, and countless others are present. In the academic year of 2021/2022, there were over 120,000 students enrolled across all the universities situated in the Greater Manchester region – all of whom are looking for rentals that suit their needs and lifestyles.

The city is also known for its rich culture and heritage, as well as the wealth of music, art, and other forms of entertainment. There are plenty of museums, theatres, music halls, and galleries in Manchester City centre, making the city a fine choice for those interested in art and culture. 

Liverpool

Liverpool, in the same span as Manchester, has seen a population increase of 7.4%. It has over 500,000 people living in the city centre and a combined 1.5 million people in the wider Liverpool metropolitan area. It is the third most built-up area in the UK.

Part of the recent population boom has been attributed to students, who are flocking to the city each year to study at some of the UK’s most esteemed universities. Currently, there are 70,000 students in this vibrant city.It is home to the University of Liverpool, John Moores University, and the Liverpool School of Tropical Medicine. The latter is the first educational institution in the world to exclusively teach and research tropical diseases and medicines.

Tourism is also another big pull for Liverpool. It has been named by several publications, such as Reader’s Choice, Conde Nast, and more, as the UK’s “friendliest city”. Millions of tourists come to the city each year. A staggering 31 million visited in 2022 alone. Over 35,000 people in the city are employed in the tourism industry.

It’s famous for its rich music history. The Beatles are Liverpool-born and a household name across the world. Music history aside, the city is also a popular tourist destination for football fans. Liverpool is home to two of the biggest clubs in the world, namely Liverpool FC and Everton FC.

Tourists are also drawn to the city for its burgeoning restaurant culture and its proximity to some of the UK’s best nature spots, such as Eryri National Park, the Lake District, and the Peak District. All this makes it a viable option for property investors looking for properties for short-term lets.

Others

Several other cities and towns in the North West have been experiencing a steady increase in population over the past decade. These areas include places other than Manchester and Liverpool.

The growth in population has been consistent and ongoing; Preston has seen a growth of 5.6%. Chester has increased by 8.4%, from just over 329,600 in 2011 to 357,200 in 2021. These cities are popular for people who want cheaper rent and a quieter lifestyle outside big cities. They are often used as commuter towns.

How To Invest In North West Property

At North Property Group, we specialise in finding the best property investment opportunities in the North West and beyond. We have a deep and extensive knowledge of the UK’s real estate market and can provide professional advice to help you maximise your investment. Book a free consultation with us today so we can help you unlock your investment potential.