Residents of Manchester won’t be surprised to learn it is frequently voted the best city to live in the UK – regularly beating London. And its popularity translates into a highly successful rental market. According to the latest buy-to-let data, Manchester is now among the UK’s top 10 places for rental growth. There are six key secrets to why Manchester has suddenly reached the premiership league in buy-to- let investments:
- Rental rates
Manchester is experiencing a 7.53% average rental price growth as the city booms in confidence. With its mix of restaurants, galleries, music venues, and of course successful football teams, it’s probably not surprising demand is so high.
Manchester has re-invented itself in the past 20 years, and its diverse population is reflected in two of its fastest growing tenant groups: young media professionals who may have moved from the south to take advantage of the opportunities MediaCity brings; and students enjoying life at one of the city’s hugely successful universities.
- Media magic
Manchester has fast become the embodiment of Metropolitan living with its enviable mix of culture, education and business. Of course, the city was always home to successful media organisations such as Granada: home of ‘Corrie’ and Sherlock Holmes. Now, as well as ITV Granada, the BBC has moved in to MediaCity in Salford in a big way.
Many of ‘Aunties’ most popular TV and radio shows are now based in Manchester, partly because of an attempt to reduce the Corporation’s perceived London-centric output, but increasingly because the city is now where a lot of the nation’s creative talent prefers to live. Young professionals are attracted to the city by the business and creative hubs, and of course provide attractive buy-to-let opportunities for investors.
- Building boom
Manchester is also undergoing a building boom, with a record 6,900 residential homes under construction this year and four high-rise tower blocks being raised, according to Deloitte. This ensures there are regular opportunities for buy-to-let investors.
But it’s not only the availability of properties that make the city attractive to would-be buy-to-let investors. Higher property prices in London can mean that rental yields there are often lower than in Manchester.
LendInvest’s new index of the country’s best areas for buy-to-let investment has Manchester entering the top 10 for the first time, after an impressive rental price growth increase of 7.53%. It says on average Manchester buy-to-let properties give a 6.11% yield, with capital gains 7.58%.
- Postcode precision
One reason for the boom in Manchester’s popularity in the buy to let market is the number of easily identifiable areas of the city that currently offer value and high demand. Choosing the right part of Manchester is of course hugely important. The M6 postcode includes Pendleton, Claremont and Langworthy, as well as part of Salford. It’s not far from the centre of Manchester, and the University of Salford is close by, so it’s a popular area for students.
Investment experts say typical monthly rents come in at £1,034 in this postcode and data shows that M6 currently boasts the best rental yields in Manchester, with average yields nearing 9%.
- Successful students
Students are particularly key to the success of the M6 area, and also locations such as the M14 postcode. That’s because there are a lot of students in Manchester! There are more than 80,000 students in the city: one of the largest university populations in Europe. Part of the attraction for students is that Manchester University is part of the elite Russell Group, and one of the most targeted establishments by leading graduate employers. Manchester Metropolitan University and Salford University are also extremely well respected.
But another of the ‘right’ parts these days may surprise you! The M14 postcode, to the south of the city centre, includes places like Fallowfield, Rusholme and Moss Side. Anyone of a certain age will immediately recognise the name Moss Side. It was once notorious for riots and gang violence, but Moss Side has received lots of recent investment that’s turned it around. Buses into the city centre take only ten minutes, and there’s a good cycle network too.
The main University of Manchester campus is close by, so this is the most popular part of the city for student rental – about 30% of the population are full-time students. TotallyMoney.com says M14 is another top pick amongst buy-to-let investors, who are currently seeing average rental yields of over 8%.
- Transport triumphs
Where else to look? This is Manchester, so it has one advantage over central London – a hugely popular and efficient tram network. Good transport connections are important for attracting tenants – and of course should you come to resell the property. Nationwide recently revealed that buyers in Manchester were prepared to pay 4.6% more on average for a home within 500 metres of a tram stop.
In summary, Manchester is booming; with a growing middle class and student population. It’s also affordable, has a healthy supply of buy-to-let properties and is enjoying well above average rental income growth. Small wonder when it comes to identifying the area as a buy-to-let hotspot, most investors are united about the city of Manchester!