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Rents in Manchester & Leeds Rise by Almost 10% as Demand Returns to City Centres

April 19, 2022

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Article Summary

Where to Invest
  • Rents in cities like Leeds and Manchester are performing particularly well – up by nearly 10% compared to the UK average of +8.3%.

  • At the same that tenant demand has been growing, the supply of buy to let properties has been falling, leading to a perfect storm of over-demand and under-supply.

  • The Zoopla report shows that during the second half of 2021, 8% of previously rented properties were put up for sale.

Rents in city centres across the UK are booming as the country gets back to normal following the coronavirus pandemic. And rents in cities like Leeds and Manchester are performing particularly well – up by nearly 10% compared to the UK average of +8.3%.

 

Booming city centres

The latest UK Rental Market Report from Zoopla gives great news for those with an investment property in Leeds or Manchester city centre. Thanks to the reopening of offices, the return of students and the growing increase of international demand, city centres are booming once again.

Rental demand has risen so sharply that Q4 of 2021 saw the fastest growth in rents in 13 years. Over the last year, landlords who have invested in Manchester city centre property saw rents go up by an average of 9.7%. Rents in Leeds city centre followed closely behind with a 9.6% increase over the past 12 months.

 

A perfect storm for rental growth

It is not only growing demand that has led to these incredible rental increases. At the same that tenant demand has been growing, the supply of buy to let properties has been falling, leading to a perfect storm of over-demand and under-supply.

In fact, this gap between supply and demand has been so severe, that some cities like Manchester are crying out for people to invest in Manchester property.

 

Reduction of rental supply

So, what has caused the number of rental properties available to tenants to fall so dramatically? The Zoopla report shows that during the second half of 2021, 8% of previously rented properties were put up for sale. With house prices rapidly rising, some landlords cashed in on their profits and either left the market or reinvested elsewhere.

The report also states that stamp duty changes and taxes against landlords have led to reductions in the number of rental properties available.

 

A confident year ahead

But despite some landlords leaving the market last year, research from Shawbrook Bank shows that the majority of landlords – 67% of those questioned – are confident in the UK property investment market over the next year. The Shawbrook report also shows that 34% of landlords plan to purchase at least one more property over the next 12 months.

With confidence in the UK property market high and with house prices and rents continuing to grow, investing in a Manchester city centre property or buying an investment property in Leeds city centre could be a sensible financial choice.

 

What is property investment?

Put simply, property investment is property purchased with the intention of generating financial returns for its buyer. These returns could be in the form of rental income through buy-to-let properties, house price growth through the future sale of the property or both. Property investments can be owned by individuals or organisations and can be short, long or medium term.

 

Find out more

To learn more about buy to lets in Manchester or about property investments anywhere else in the lucrative north west, contact North Property Group now.

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