Curious about the burgeoning buy-to-let market in Manchester?

Manchester is one of those cities in the UK, indeed the world, which has ‘it’. Difficult to define, it has nothing to do with soaring architecture or aeons of history, although modern Manchester has both in spades.

It’s an industrial city, or rather it was, but that still defines it, in the same way that shipbuilding and the Clyde still define Glasgow. That may no longer be true these days, but it lurks in the background, refusing to leave.

These days Manchester is one of the UK’s most vibrant cities with three universities, extensive nightlife and a concentration of media companies situated in nearby Salford.

Its popularity is reflected in a healthy buy-to-let market and good yields for prospective investors, so as a buy-to-let property professional, I’ll show why Manchester isn’t just a great place to be, but a great place to invest!

Manchester – the city

The city of Manchester is the hub of Greater Manchester county. Starting in AD79 with a Roman settlement, Manchester grew at a modest rate until the turn of the 19th Century and the advent of the textile industry and the industrial revolution.

Achieving city status in 1853, and with the opening of the Manchester ship canal in 1894, Manchester became the first industrialised city. This status would persist until after the Second World war, when it suffered from slow industrial decline.

From that point the city ballooned as workers flooded in to man the newly-erected factories, fuelling a requirement for housing and other facilities.

A failed olympic bid in 1992 seems to have opened the city’s eyes to its place in the world, as it realised that it was competing with cities such as Barcelona and Los Angeles, and set its sights and expectations accordingly.

Ironically, the massive 1996 IRA bombing of the city centre kick-started a recovery of the city, having made rebuilding a necessity because of the extensive damage.

Its global status has been enhanced by being home to both Manchester United and Manchester City football clubs, both of which have fanatical following around the globe.

The buy-to-let market in Manchester

As a city with three universities, Manchester has a correspondingly high number of students, many of whom seek term-time accommodation. Greater Manchester is an exceedingly populous area, pushing the demand for property and housing.

In December 2022, Aldermore’s report declared that Manchester had reclaimed the top spot in the UK as the best city for buy-to-let investors, and other industry voices have echoed this sentiment.

At present, Manchester has that magic combination of reasonably priced housing and high demand for rented accommodation. With good road and rail connections throughout greater Manchester, it’s worth considering areas beyond the city as well.

As well as attractive rents, investors can expect to see a good level of capital appreciation over time. Manchester benefits from high levels of graduate retention, fuelling the demand for accommodation further.

In addition, the attractive nature of the city and its opportunities have led to continuing migration from other parts of the UK, increasing the city’s population and driving demand.

In the city centre M1 postcode area, the average property price in 2022 was £314,547. In the same area, average rental yield was a healthy 6.19%.

The M9 postcode, which includes Blackley and Harpurhey, sees an average price of £185,979 and average yield of 7.07%.

Overall, Manchester has enjoyed capital appreciation of around 28.21% over the past five years, and the projected growth in rents is 16.5%

Greater Manchester

When considering whether to invest in the buy-to-let market in Manchester, it’s important to remember that ‘Manchester’ can mean much more than just the city itself, attractive though it is.

Greater Manchester encompasses 10 metropolitan boroughs and two cities, Salford being the other, all of which have great potential for buy-to-let investors. Whether in a city centre or on the edge of the countryside, you can find it all here.

The North West of England is well served with excellent road and rail links, making commuting an attractive prospect to those who can’t face city-centre costs, or just appreciate a slightly quieter life!

The M60, M62, M602 and the M56 can make getting around the area easier, although rush hour can be a challenge! Consequently, areas outside the major conurbation, such as Bolton, may be worth considering to invest in.

Bolton featured in a 2023 list of rental hotspots, and although the yields claimed were not as high as some areas of Manchester, capital growth per annum offset that where an investor was taking a balanced approach.

Despite its historical roots in the industrial heartland, Bolton and the surrounding towns and villages are very close to the Pennines and some lovely countryside.

This, combined with increasing employment opportunities makes it very attractive to tenants seeking easy access to a major city but not necessarily wanting the city life.

Even small towns, such as Westhoughton currently offer a range of properties to let with rents from £500 pcm to £1,500 pcm. This is aided by the proximity of the M62 motorway, making commuting an attractive possibility.

Advice from the property pros

With Manchester it’s almost a case of ‘where to start’! The population of the greater Manchester area exceeds that of Scotland; that should give you some idea of the potential here.

After decades of post-war decline in the twentieth century, Manchester is most definitely on the up and up, however as a northern city, property prices haven’t hit the giddy heights of the south east of England.

That combination makes for excellent investment potential, as populations in the city and surrounding area continue to swell and the demand for good quality rented accommodation grows.

The most recent metrics suggest that this is an area that will reward the buy-to-let investor, both with attractive yields and long-term capital growth making it attractive to those with medium to long-term strategies.

In addition, the recent publication of the Renters (Reform) Billmay have a positive impact for new buy-to-let investors, as some existing landlords may decide to quit the market, raising the possibility of acquiring property with sitting tenants.

The bottom line is that Manchester and the surrounding areas currently offer fantastic opportunities for investors, a situation that many expect to persist for the foreseeable future.

In summary…

As a company which specialises in bringing investors and opportunities together, buy-to-let in Manchester is a perfect example of what gets us out of bed every morning!

The numbers across the board are good to excellent and there is an unrivalled amount of choice available to the investor in a relatively small geographical area.

With decades of experience in helping landlords find new and profitable opportunities, we would be more than happy to sit down and discuss how properties in Manchester could fit into your portfolio.

If you’d like to know more about us and Manchester – not to mention opportunities throughout the UK – please get in touch.

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]