There has never been a better time to invest in residential property in Manchester. Excellent yields, strong capital growth, a booming economy and thriving rental market is making the powerhouse of the north, one of UK’s top property hot spots.
Over that last fews years there has been a surge of overseas investors snapping up buy-to-property in the city and many UK investors are shifting their focus from London to the Manchester.
Offering yields of almost 8%, Manchester sits in the top 10 places in the UK for rental growth according to Totally Money’s research – Great Britain’s Buy-to-Let Hotspots, April 2017.
It’s no surprise that investors are queuing up to purchase residential property. Manchester beats London hands down on affordable property, with house prices in the capital fetching five times what they are in Manchester, while salaries are only 30% higher. Manchester also offers much better rental yields than London, where they are averaging between 2-4%.
Over the last three years, 45% of residential sales across the city were completed for less than £125,000. An average three-bed semi in Manchester is just £155,000, while a flat in a good area, costs as little as £120,000. A property in Manchester can provide a 5% minimum cash rental yield and a typical 12% total cash yield, including 7% capital appreciation.
Savvy investors can achieve yields of 8.4% in M6 postcodes*, covering Pendleton, Claremont, Langworthy and Salford and average monthly rent of £1,034. Close to the centre of Manchester and the University of Salford, this postcode is popular with students and young professionals. (*Source: Totally Money 2017)
South of the city centre, the M14 postcode, covering Fallowfield, Rusholme and Moss Side, is seeing average rental yields of over 8%. Again, this postcode is popular with students, as it is close to the main University of Manchester campus.
The M5 postcode, which is close to the M6, offers average rental yields of 8%. This area includes the Ordsall estate, which has been given a £100 million transformation to create a complex of modern townhouses and apartments. The M38 postcode, in the north west of the city, covering Little Hulton, is giving landlords average rental yields of almost 7%.
Manchester’s housing market in being bolstered by a major regeneration north east of Victoria station, where 8,000 new homes are being built over the next 10-15 years. There’s also a £1bn plan for another 8,000 homes, including the conversion of the Murrays’ Mills and a further 3,000 homes on the former ITV Granada studios at St John’s Quarter.
Manchester is a very affordable place to live and demand for property is soaring in the City, thanks to the expansion of the MetroLink tram system, the trendy Northern Quarter and the BBC Media City.
It’s a great place for investors. I have built a successful, mid-sized portfolio of buy-to-let properties in South Manchester. Over the last 12 months I have enjoyed average rental yields of 6% across over 100 properties.