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Residential buy-to-Let

Buy-to-Let Focus: Manchester

Author: Gemma

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Finding the right buy-to-let property investment can be time consuming. Read our top 5 reasons why Manchester may be the right location for you.

Low entry level

When it comes to property investment, the north south divide has been much debated.

It’s no secret that the UK’s housing market is gaining momentum, with property prices surpassing their 2007 peak in June according to new figures from Nationwide.

London, paves the way for property price gains with the average property now costing £400,000.

With rising prices, it’s no wonder why more and more investors are looking north for opportunities to generate an income from the UK’s property market.

In Manchester, the average cost of an apartment is £127,664 (Land Registry Price Paid Data 2013) whereas the average for England and Wales is £250,101 according to Land Registry.

A lower entry level investment may offer landlords and investors a way to expand their property portfolio.

Yields

Projected yields are an important part of any buy-to-let property investment.

Data from to LSL Property Services shows that the average rental yield across the UK currently sits at 5.2% as of Q1 2014.

According to the latest HSBC rental yield league table, Manchester’s average yield stands at 7.6% (April 2014), making it a far more attractive location for investment.

What’s more, data from HSBC also shows that rental growth in Manchester has increased year-on-year by 5%.

High demand

There is a high demand for rental accommodation in Manchester as 26.85% of housing stock is privately rented (HSBC).

Young professionals and students are two of the main rental markets.

Manchester has a large population of young professionals. Research from the Express shows that there are now around 123,600 20-somethings living in Manchester, indicating a large rise from the 78,301 who lived there a decade ago.

20-somethings are an idea market for lettings as they typically cannot afford the large deposits required for a mortgage.

The City is home to four large universities. Manchester Metropolitan University is the UK’s biggest campus-based undergraduate university and has a total student population of more than 37,000.

With student arriving from the UK and overseas year-on-year, there is a constant stream of tenants migrating to the city. A large number of wealthy, international students who search for high-end accommodation also provide a niche for investors to market their properties to.

Capital growth potential

According to Nationwide building society, in 2013 Manchester beat London to become the UK city with the strongest house price growth.

Over the course of the year, property prices in the City increased by 21% – much higher than the UK’s national average of 8.4%.
Outperforming every other city in the UK, Manchester – especially the city centre – offers investors strong capital growth potential.

Established property market

Named the Most Liveable City in the UK in 2013 by the Economist Intelligence Unit survey, Manchester is a popular and lively city.

From famous football teams to famous musicians, from world-class universities to Salford’s new media city, Manchester has a lot to offer and is a lively location with a strong cultural identity.

The popularity of the city has helped propel the property market into the forefront of the headlines and has helped it to become a property hotspot for investors.

Boasting a stable and well-established property market, Manchester offers investors a low entry into the UK’s real estate market and in theory could produce higher rental returns than other locations across the country.

Follow the link and discover how you can generate a passive income from buy-to-let property in Manchester.

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