Why You Should Invest In The Manchester Property Market
As the London property market continues to price many would-be residents and investors out, and Brexit fears deter many foreign investors that once saw the capital as a safe bet, eyes are turning to the United Kingdom’s second-largest economic hub, Manchester. Often described as the country’s “Northern Powerhouse”, Manchester is a city that is thriving – seen as an affordable and desirable investment alternative to London.
There are many reasons why Manchester has become one of the UK’s hottest spots for property investment. Last month, new research from commercial property consultancy Lambert Smith Hampton (LSH) declared the Manchester property market as the north of England’s most lucrative to invest in. The research surveyed property developers and investors, with two-thirds (68%) stating the city as their preferred place to put their money. The reasons for Manchester investment being so popular included the city’s high-quality educational establishments, a variety of businesses and excellent transport links.
Manchester has been the focus of the UK Government’s plans to turn the North of England into a powerhouse, helping the area to compete with London and the South. Arguably, one of the biggest turning points for the North was when a number of large media businesses relocated from London to Manchester after the height of the recession.
The BBC’s move to Salford’s Media City was a huge boost to the local economy and saw the appeal of Manchester skyrocket for young professionals and businesses alike. A number of other companies, such as Grenada and ITV, also relocated to Media City, making the area the country’s new media hub. Thanks to these large-scale commercial moves, a number of highly skilled professionals have followed these businesses to Manchester and a further £300m per year has been contributed to the local economy.
It’s not just the media industry that has seen rapid growth in Manchester. Industries such as financial services, engineering and technology have also grown exponentially due to regeneration initiatives by the Government. London has long held the title for containing the largest community of young technology start-ups; however, Manchester has now attracted a pool of talented entrepreneurs, becoming an appealing hub for technology innovation. Manchester is increasingly being regarded as a city that can offer career prospects, along with manageable living costs, considered by many to offer a higher quality of life than London.
Strong Rental Market
Due to the growing career opportunities available in Manchester, the city is becoming an increasingly popular choice for young professionals. For this reason, the rental market is soaring, and landlords are finding that potential yields are a lot higher than those offered in London. National estate agency, Savills, recently named Manchester as the city offering the strongest regional property investment potential. Manchester property can achieve rental yields of 7.98 percent, compared with London’s highest-earning borough – Newham – which makes landlords an average of 5.2 percent yield. The city is experiencing a high demand for rental housing, along with a low supply of housing. This has created sky-high occupancy rates, creating the ideal environment for landlords; around 27% of Manchester’s housing is rented privately.
An International Gateway
In addition to this recent influx of businesses and residents, Manchester is also a convenient international gateway – well connected by road, rail and air. Last year it was announced that Manchester International Airport, which is already the UK’s largest airport outside of London, is to receive a £1bn investment. The project, which will double the size of the airport’s second terminal, will be the largest construction ever to take place in Greater Manchester, taking place over 10 years and doubling the number of airport jobs to 40,000 over the next 30 years. Manchester International Airport already accommodates more than 20 million passengers per year and facilitates flights to more than 200 destinations, including hub cities such as Dubai, Hong Kong and New York. The new development plans will enable the airport to accommodate a further 10 million passengers every year.
On a local level, Manchester is also within a two-hour train ride from London, and boasts direct rail links to many of the UK’s other major cities. Furthermore, Manchester is at the centre of the new HS2 project, a high-speed rail line that will link the city with Leeds, Liverpool, Birmingham and London. The city has five main stations, which link central Manchester to locations throughout the rest of the country and it also enjoys the convenience of the Metro rail tram service, which links destinations across the centre.
Buying property in Manchester is also popular due to the city’s excellent educational establishments. The University of Manchester is within the UK’s top ranked establishments for higher education and attracts a high volume of students looking for accommodation. Letting property to students can be a lucrative investment for landlords and – with their close proximity to the university campuses – the city’s southern boroughs are popular locations for student rentals.
Another reason to invest in Manchester is the continuous work that is going into developing the city. It is widely expected that many other large commercial businesses will follow in the footsteps of the BBC and relocate to Manchester in the near future. Manchester is already home to around 70 percent of the UK’s FTSE 100 companies, which no doubt see it as a cost-effective home, whilst also providing them access to a talented pool of professionals. With Manchester’s commercial growth, its critically low supply of housing must be addressed; in ten years’ time, if population growth and new build housing creation continue at the current pace, Manchester will have 1,500 more families than houses. For this reason, investment property in Manchester is in high demand, and now is an excellent time for property developers to create new homes in the city.
In conclusion, Manchester property investment offers excellent profits and yields, and is a sensible choice for those looking who are frustrated by high prices and lower returns offered by property in the capital.