Manchester has been one of the UK’s biggest and most headline-grabbing cities lately when it comes to property investment. It has attracted much praise in this regard, and most recently has been rated by Savills as the UK’s strongest regional investment destination. Those who are moving away from London’s high prices and disappointing yields often seem to treat Manchester as top of the list of alternatives.
The Facts and Figures
The biggest factor attracting investors to Manchester is simply a matter of figures. The average figure for just about everything that is desirable to property investors is attractive. Last year, analysis by HSBC showed yields of almost 8% (7.98%), which was higher than any other UK city. The rate of yield growth is similarly impressive, averaging 6.02% since 2010 compared to a national average of just 4.1%. Capital growth is also impressive, with Manchester being one of only two Northern cities so far to have exceeded pre-crisis prices.
Strong Growth Prospects
Manchester is a city that seems to be embarking on a significant process of growth. Significant levels of governmental and private investment in the city are lined up, with Manchester being at the forefront of the Northern Powerhouse initiative. Investment in infrastructure, property, and business development should be significant over the coming years, and this adds a lot of attraction to the city’s investment market.
Growing Population vs. Low Supply
Manchester is a busy, major city with a large population – and that population is growing at an impressive rate. Indeed, the population of the city increased by almost a fifth (19%) between 2001 and 2011, and is currently growing at three times the national average rate. As more and more people come to call the city home, there will naturally be more demand for places to live. However, Manchester is a city with a significant undersupply problem when it comes to residential property. Despite a number of major construction projects in the city, rapid population growth means the gap is unlikely to close any time soon and demand is therefore expected to remain high.
The Right Demographics
In terms of property investment, Manchester’s population has more to offer than simple numbers. The types of people living there also help to create a strong rental market and plenty of demand for residential lettings, giving investors a range of investment options to choose from. Manchester has a very young population compared to many other parts of the UK, meaning that a lot of people are at the stage in their lives where they are likely to rent rather than buy. The presence of a significant student population thanks to multiple universities being located in the city also helps create demand for lettings, whether they are specialist student properties or houses offered for use as student HMOs (Houses in Multiple Occupation).