Manchester is quickly becoming established as one of the top regions for buy-to-let investments in the UK. Savills has even given it Britain’s strongest regional investment rating due to its strong economy, capital, yield growth and appeal as somewhere to live. Here are five reasons why investors should be seriously considering Manchester.
- A Strong Market
With low prices, high returns and strong growth in Manchester’s rental market, more and more investors are turning away from London to this north-west city. Manchester is one of the few cities outside of the capital where property prices are even higher than before the financial crisis.
Average yields are better in Manchester than in London having grown by 6.02% on average since 2010 – compared to only 4.71% for the highest yielding borough in London.
- A Growing City
Manchester’s population is growing by three times the UK average, increasing by 10% between 2001 and 2011. This should really be no surprise, considering it’s one of the most desirable cities in the country to live – in fact, it was named the best city in the UK to live by the 2015 Global Liveability Survey.
Market-leading global businesses are also flocking to Manchester, including BBC and HSBC. They have brought with them excellent job opportunities and Manchester now has one of the fastest job creation rates in the country – in April 2015 the city saw an increase of 47% in job openings, whereas London had 42%.
All of these jobs are bringing even more people to the city, but that comes with its own problems.
- An Undersupply of Accommodation
Such a massive population boom can cause issues with lack of accommodation, but as Manchester already has one of the lowest levels of housing stock in the UK the city’s undersupply is especially great.
New properties are being built in Manchester, though despite this it is still predicted that by 2026 there will still be 1,500 more households than homes.
This creates a twofold opportunity for investors. In the short-term yields and capital growth are rising as ever more people fight over places to live. In the long-term there is a massive opportunity to invest in new products and sectors for Manchester’s booming population.
- An Increasing Young Population
Manchester is hugely desirable for young people who either remain in the city after graduation from one of the region’s five universities or are drawn by the large number of job opportunities and excellent culture and nightlife. People aged between 25 and 29 years old now make up over 60% of Manchester’s growing population, a large proportion of whom desire city-centre rental accommodation.
This creates a great opportunity to invest in high-quality, city-centre accommodation for this sector of Manchester’s workforce.
- Forecasted Economic Growth
Thanks to being at the heart of the government’s Northern Powerhouse Scheme and benefitting from massive investment and projects such as HS2, Manchester’s economy is predicted to go from strength-to-strength.
In the decade between 2016 and 2026 70,000 more jobs are expected to be created in the city and the population is forecasted to grow by over 125,000. Manchester Airport will expand to double its capacity and become a global transport hub in a £1billion project.
It is likely that this will cause property prices in Manchester to increase, so many investors are adding assets to their portfolios now to ensure the best returns.