Location. Location. Location. It is the famous mantra that dominates almost any property purchase in the UK, and this is particularly important when it comes to buying an investment property.
It needs to be able to offer you the right potential market, the necessary rental yields and a healthy capital gain in order for it to be a worthwhile investment, so getting the right location can be the key to achieving this.
There are many great areas that you could choose for your investment, but Manchester comes top of most investors lists of property hot spots, and with very good reason.
This busy, metropolitan city offers some great opportunities for investors who are looking for places that can offer more than London these days.
The Manchester property market
One of the big driving forces behind the move towards investing in Mancunian property is the buoyant Manchester property market.
This has shown massive levels of growth in recent years, and there are no signs of it stopping any time soon.
Property prices are much more affordable in Manchester than they are in other parts of the country, particularly those further south, making it easy for investors to make the leap.
The average house price in Manchester sits just below £204,000, whilst investors would need to find more than half a million pounds for an average London property.
This affordable price point allows your money to go further and provides you with much more choice when investing.
When investing, it is essential to buy at the lowest price possible and then sell for a profit further down the line, and this certainly seems possible in Manchester.
Capital appreciation in the first three months of 2023 in Manchester grew by 5.72%, which is twice the national average.
With predictions showing that growth of almost 12% is expected in the area by 2027, it just goes to show that investing in Manchester property now might just be the perfect time.
The Manchester rental market
Of course, once you have purchased your property, you will want to make the most of the rental yields on offer, and Manchester’s rental market also looks healthy.
Property in the area is in massive demand, which has only served to drive rental prices higher.
There are less properties available in Manchester than ever, but still plenty of people flocking to the area for the career and lifestyle opportunities that it offers.
There are particular parts of Manchester, including the M14 postcode, which have rental yields of more than 8% – that is one of the most attractive yields available in the whole of the UK at the moment.
The last few years has seen the business scene in Manchester explode, and employment in the city has increased by a whopping 84% between 2002 to 2015.
The now defunct proposals for HS2 and the favourable property prices helped to draw a lot of big names to the city, including the creation of MediaCity in Salford.
This plays home to some major companies, including the BBC and ITV, which has boosted both the creative and tech sectors in the city.
There are also a lot of popular fashion brands such as Boohoo and Pretty Little Thing which have made Manchester their home, which has only served to drive the popularity of the area even further, particularly with graduates and young professionals who might otherwise have aimed to seek fame and fortune in London.
One of the big draws for both businesses and residents has been the massive regeneration that has taken place in the area.
The city has become part of the Northern Powerhouse and so the regeneration has meant turning old mills and factories into luxury apartments, creating vibrant new areas and improving transport links.
This regeneration has made Manchester a desirable place to live and work, and it seems set to continue for the foreseeable future.
Manchester is also known for being especially popular with students. It is home to The University of Manchester, Manchester Metropolitan University, The University of Salford, the University of Bolton and the University Academy and as such, it has a massive student population, who are all looking for somewhere to live.
It is estimated that in 2022/23, there were in the region of 498,000 students in Greater Manchester, which showed an increase of more than 40,000 students since 2015/16.
Currently, there are more students in the city than there is available property, which makes investing in student property a highly lucrative option.
There are options to buy and convert an existing property which can be used for multiple occupancy, or investing in purpose built student accommodation which is fully managed and offers a range of facilities that make it hugely appealing.
Typically, student property is cheaper to buy than other property investments, but due to the lack of supply, the rental yields can be substantial.
These days, many students are looking for higher standards in their living accommodation and are therefore prepared to pay more to achieve that.
Manchester is rapidly becoming thought of as a place that many young professionals are heading to, and so a bright and diverse culture has started to develop in the city.
From food and drink, to music, art and fashion, Manchester is now the place to see and be seen.
It is viewed as somewhere fashionable and cosmopolitan, which means that it is not just drawing more people to the area, but it is attracting people with healthy incomes who are looking for a good standard of living.
The city of Manchester is now becoming a business, creative and digital hub, as well having a thriving student scene, which means property in the area is in high demand.
As this shows no signs of slowing down soon, investors are now seeing some great opportunities in the area and have already begun to reap the benefits, making it one of the most attractive property investment locations in the whole of the UK.