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Property Market Manchester 2021 Report

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    The RWinvest Manchester Property Market Report [2021]

    If you’ve ever considered investing in property, chances are Manchester has been at the top of your list.

    The North West city is perhaps the worst kept secret in the UK housing market, with headline growth rates and rental yields making Manchester property investment an incredibly attractive venture.

    There’s been a strong consistency in Manchester property over the past few years, and, surprisingly, 2020 was no different.

    Despite circumstances that could have never been predicted, the market remained remarkably stable and reached new heights come 2021.

    But after such a year of stunning growth rates, can the market continue like this in 2021?

    Well, we are going to try and answer exactly that.

    This Manchester property market report 2021 will analyse property prices Manchester to help estimate what could happen over the next 12 months.

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      Current Property Prices Manchester 2021

      Manchester is a city ripe for investment thanks to its fantastic levels of affordability.

      According to the latest official government data from the UK House Price Index, the average property prices Manchester sit at around £200,514. For Greater Manchester, this price decreases to £192,305.

      This means property prices have increased in the city by around £17,500, or 9.61%, in just 12 months.

      Comparing this to the UK average, you can see just how affordable the North West city is.

      As it stands, the average property prices in the UK are £251,500. That’s over 25% more expensive than a typical Manchester property.

      Manchester property price growth has far exceeded the national average over the past 12 months, with average UK property prices increasing by only 8.41%, compared to Manchester’s 9.61%.

      Throughout the last year, Manchester has topped the UK house price growth charts, with a Zoopla report finding that Manchester is the fastest growing property market in the UK.

      Based on all these statistics, it’s clear why Manchester is so enticing for investors.

      A combination of affordability and staggering growth levels make the property market Manchester one of the safest asset classes for investment.

      But property prices aren’t the only factor that makes Manchester so exciting – the rental market is also thriving.

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      Manchester Rental Market 2021

      According to Zoopla, the latest Manchester rental price is £1,205. For Greater Manchester, rent is valued at £1,095. And in Salford, prices are £1,264.

      While these numbers already exceed the national average of £979, the combination of high rent and low prices has resulted in some of the highest average yields you can find in the world.

      Based on UK house price index data, the average rental yield in Manchester is around 7.2%. For Salford, this figure is at 8.5%!

      This is a staggering number, with the UK average only 4.7%.

      Rental yield is the return on investment you earn through rental income. It is calculated by calculating the yearly rental income and dividing it by the price of the property. This figure is then multiplied by 100 to calculate a percentage. Typically, anything between 5 or 6% is considered good for rental yield.

      This shows just how fantastic the Manchester rental market is.

      It’s important to remember that this is figure is just an average, with some areas in Manchester generating far higher yields.

      Based on our calculations, you can expect yields upwards of 10.64% in the M5 postcode, with an average rent of over £1,800.

      So, why is the Manchester rental market thriving so much in early 2021?

      Well, Zoopla found that buyer demand soared by about 40% in 2020, with the current ratio between available supply and demand for property in Manchester sitting at 1:5.

      In fact, in late 2021, a report was released showing that Manchester rental market demand is at a new high, with the lowest ever supply of Manchester property available.

      These massive demand levels are caused by several factors, but the bottom line is that more people are moving to Manchester than ever before.

      The population of Greater Manchester grew by 7.7% between 2006 and 2016, which is double the UK growth rate over the same period.

      This places the Greater Manchester population at around 2.8 million – just over 282,000 higher than 30 years ago.

      Growth levels in Manchester are even higher, with a 27.8% increase since 1991.

      Thanks to fantastic business opportunities and a wealth of regeneration, thousands are moving to Manchester each year. This makes Manchester property investment an incredibly secure venture, as you are almost guaranteed to find tenants for your properties.

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        What Happened to the Manchester Property Market 2020?

        Last year was a whirlwind for everyone, not just property investors. With two national lockdowns, economic uncertainty was rampant and dominated the minds of investors looking to invest.

        Many industry experts predicted doom and gloom for the property industry, expecting to see a market crash.

        However, a combination of government action and the ever-growing need for property has helped the market reach new heights.

        The average UK house price surpassed the £250,000 mark for the first time, with the highest growth rates since 2004.

        Likewise, property prices Manchester were no different.

        While there was an initial dip during the first lockdown (which was expected), property prices shot up post-June.

        To truly appreciate the Manchester property price growth levels of Q3 and Q4 2020, it’s essential to compare the prices to the previous year.

        December 2020 prices were around 7.93% higher than December 2019. Likewise, August 2020 and September 2020 were 5.54% and 5.55% higher than their 2019 counterparts.

        These staggering Manchester property price growth levels in the Manchester property market 2020 have undoubtedly been spurred on by several factors.

        Covid-19 Changes Tenant Habits 

        The first factor is one directly connected with the lockdown.

        With many forced inside their home for months, tenants have started re-evaluating what they want out of their homes to meet their new way of life.

        Property portal Rightmove documented these desires. They found that around 37% of people now want space to work from home, 35% want high-speed broadband, and 31% want a garden.

        Build Magazine found similar results. The number one recorded desire was fast broadband, number two was outdoor space, and number three was having access to outdoor green space like a nearby park.

        Perhaps most interesting about Build Magazine’s rankings was the direct change in habits. Originally, excellent transport links were the most valued necessity amongst tenants. But since working from home, this desire has dropped from the top spot all the way to fifth.

        Similarly, outdoor space and nearby parks rose from seventh and ninth to second and third.

        These factors are now critical if you’re considering investing in property in 2021.

        You should try and find properties that provide these desires as much as possible, or you may face little interest from the public.

        Stamp Duty Tax Holiday 

        Another factor that has spurred on investment both domestically and from overseas investors is the stamp duty holiday.

        Announced in July 2020, the government-led cut of the stamp duty tax has undoubtedly been a significant reason for the property markets success over the last 12 months.

        Stamp duty is a tax paid when you purchase a property in England and Northern Ireland.

        But with the holiday, various tax rates have been cut. It means that investors can save up to a potential £15,000 on their property purchases.

        The holiday was originally set to end in March 2021, but has now been extended and will continue until the end of June.

        If you want to find out how much stamp duty you will need to pay on a property purchase, check out our stamp duty calculator to find the current rates.

        Be sure to take advantage of these once in a lifetime savings and contact RWinvest today to view the latest opportunities.

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        What Will Happen to Property Market Manchester 2021?

        So, now that we know what happened in 2020, we can guess a prediction for Manchester property market 2021.

        With the imminent ending of the stamp duty holiday, the nationwide rollout of vaccinations, and a confirmed roadmap out of lockdown, there’s a tonne of factors influencing the property market.

        To answer this question, then, we need to see what industry experts think will happen.

        Property Market Forecasts UK 2021

        As you can see from the table, experts predict nominal growth, and in some cases, negative growth, over the coming 12 months.

        The negative price predictions by Halifax stems from the anticipation that there will be a slow economic recovery post-lockdown, with a rise in unemployment levels upon the ending of the furlough scheme.

        While this may happen, as those with mortgages may lose their jobs and be forced to sell their homes at a discounted rate, experts like Rightmove anticipate further growth.

        This optimism isn’t misplaced. The government is keen on promoting economic growth, with banks incredibly lenient on mortgage holidays. The stamp duty tax has been extended, and it has been recorded that around £4 billion has been saved by people during lockdown.

        So, who’s right? Well, unfortunately, it’s impossible to tell what will directly happen over the coming months.

        Life is often uncertain, and if the Covid-19 pandemic has shown us anything, it’s that. Property prices may fall this year, but does that mean you shouldn’t invest now? Not at all.

        Property is a long-term investment. It’s important to look forward far into the future rather than looking at the here and now.

        While these price changes can give useful information over the next few years, it’s vital to keep in mind that property investment is at it’s best when you wait for decades to sell.

        This way, you can maximise your profits and experience substantial growth.

        Whatever prediction for Manchester property market experts might have, the city’s future growth should make you incredibly confident you are making a top investment.

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          FAQs

          If you have any questions about the property market, then you’re in luck with our FAQ section! Here we have compiled answers to all the most common questions you may have about the Manchester and UK property market.

          No, it’s highly unlikely property prices will crash in 2021. While some experts have predicted negative growth of up to -2%, others like Rightmove have anticipated huge growth rates of 4% in 2021.

          Even if there is minimal growth, it’s unlikely property will be impacted in a hugely negative way. Property is remarkably resilient and always finds a way to recover, even after times of economic turmoil.

          No, house prices are not falling in Manchester. Across 2020, the average property price in Manchester grew by 9.61%. According to Zoopla, property prices Manchester is 2.81% higher in March 2021 than in March 2020.

          According to the latest UK House Price Index figures, the average property prices in the UK are currently at £251,500. This is the first time it has surpassed the £250,000 mark.

          According to the latest government data on the UK House Price Index, the average Manchester property is valued at £200,514. This is 7.93% higher than 12 months prior.

          Yes, Manchester is a fantastic location for property investment. Property prices are over £50,000 less than the national average, while also generating substantial rental returns of around 7.2%

          Manchester is a relatively expensive city to live in. The cost of living Manchester for a single person excluding rent, is around £669.48, which is 4.04% more expensive than Liverpool. However, the cost of living in Manchester is far lower than in London.

          Yes, Manchester is far cheaper to live in than London. Consumer prices in Manchester, excluding rent, are 15.47% lower than in London. Rental price is significantly lower in Manchester, with London prices 115.93% higher. The cost of living in Manchester is considerably cheaper than in London.

          Yes, it is a good time to buy a house in 2021. You can save up to £15,000 with the stamp duty tax holiday when you purchase a property. UK Property prices grew by 8.41% in 2020, with an additional 4% growth expected in 2021 by Rightmove. House prices are set to grow by 20.4% on average by 2024, meaning now is a good time to invest to take advantage of lower house prices.

          The lowest Manchester house prices by area are Wigan, Bolton and Rochdale. Wigan prices are £150,452, Bolton is £152,282, and finally, Rochdale is £153,440.

          The most expensive area in Greater Manchester is Trafford, with house prices at £328,728.

          According to the latest property news in Manchester, Wigan prices have risen at one of the highest rates in the country – 12% higher than a year ago.

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          Property Prices Manchester Over Last Five Years

          To anticipate future growth in 2021 and make an accurate prediction for Manchester property market, it’s crucial to understand how much prices have grown over the past five years.

          If an area shows massive growth over the previous years, it can be safe to assume that this trend will continue.

          As you can see from the Manchester property price trend, property prices have increased consistently over the last five years.

          In fact, comparing property prices from 2015 to 2020 shows a growth rate of 38.19%.

          Savills has predicted these growth rates will continue along this path, with current price predictions estimating a 27.3% increase by 2024 in the North West.

          If you look back further still, property prices in Manchester have grown at a more substantial rate than any other city.

          At the end of 2000, property prices in Manchester were on average £44,201. This means that prices have increased by a staggering 356.64% in the last 20 years.

          For context, London prices have increased by 149.07%. What about Birmingham? Well, that’s at 216.78%. Leeds? 234.99%.

          There’s a pattern emerging here. No major cities have even come close to the mind-blowing Manchester property price growth rates. And, the fact is that no cities are coming to close to Manchester’s future either.

          The 27.3% predicted growth by Savills is the highest in the UK. It is over double that of London, and nearly 6% higher than the West Midlands.

          These growth rates have been consistently high over the past two decades. Prices in 2020 are 75.53% higher than in 2005 and 67.57% higher than in 2010.

          As you can see, the numbers speak for themselves. The property market Manchester is thriving at the moment and will likely continue to do so over the coming years.

          Why are these growth rates so high? There are a few reasons for this.

          A Young Population 

          As a buy to let property investor, there’s one key demographic you need to consider when investing in a city: Young people.

          Young people are the lifeblood of property investment as they are the age demographic that’s far more likely to rent.

          Often referred to as Generation Rent, those aged between 18 and 40 have usually been priced out of the housing market due to the sheer level of house price growth. This has made them far more likely to rent.

          It’s not always a forced decision, though. Research from Savills found that half of those who responded would consider renting a viable option if they couldn’t secure a property by 2021.

          Half of those then admitted they would happily rent, a signifier of the broader trend people are renting as a lifestyle choice.

          This is what makes Manchester property such a great commodity. The city has one of the largest student populations in Europe, with over 100,000 students across five universities.

          The North West city also has the second-highest graduate retention rate in the UK at around 51%. This means there’s a substantial influx of young professionals seeking work and accommodation in the region.

          The local government’s demographic figures in 2018 highlighted just how unique the city is for young people.

          As you can see from the graph, 37% of the local population is aged 18-34. These figures will no doubt continue to increase in 2021 and beyond, making student and residential property equally as fantastic.

          Student property can often be a fruitful venture to consider, with considerable rental yields attached to it due to their low price.

          One of our student properties, for instance, is valued at just £59,950 with rental yields up to 8%.

          Typically, if you aim to target young people, buying city-centre flats and apartments is the way to go.

          According to Zoopla, Manchester city centre property prices are valued at around £265,775, with average rent at about £1,097.

          Due to these Manchester city centre property prices, returns are around 4.95% which is still above the UK average.

          This shows that you can still find incredible deals in the city despite relatively high Manchester city centre property prices.

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            Manchester Regeneration 2021

            A key factor that has continued to generate interest in the city is Manchester regeneration.

            Multiple billion-pound projects have been produced in the Manchester metropolis for the past two decades, which has led to an influx of people moving to the Northern powerhouse.

            Chief amongst these projects have been Spinningfields and MediaCityUK.

            Introducing massive business sectors to the city, each project has made both Manchester and Salford Quays world-class business locations.

            MediaCityUK has attracted some of the biggest media names in the business, with massive organisations like the BBC, Kellogg’s, and ITV all moving to the Salford Quays area.

            These businesses have left London due to hiking prices favouring the Northern Powerhouse – a trend we are seeing amongst people.

            While work continues on these major projects to this day, there are some upcoming regeneration projects in 2021 you should keep in mind when buying a property.

            ID Manchester 

            After delays in 2020, further progress is set for ID Manchester in 2021- a mixed-use scheme to attract science, research, and technology companies to the area.

            The project is the University of Manchester’s brainchild and is set to cost £1.5bn in the city centre.

            Piccadilly Gardens 

            The iconic Piccadilly Gardens is set to get a fresh facelift, with a public consultation meeting beginning in early 2021.

            Demolition work already began in 2020 as a portion of Tadao Ando’s Concrete Wall was taken down.

            RHS Bridgewater 

            Set to open on May 11 2021, the Royal Horticultural Society’s fifth public display garden is sure to attract plenty of visitors come the summer.

            You will soon be able to visit the garden in Salford.

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              Top 5 Postcodes to Invest in Manchester

              M5 

              Average House Price Manchester: £203,486

              Average Rental Yield: 10.64%

              Based on Zoopla statistics, M5 is the leader of the pack when it comes to rental yields in Greater Manchester.

              The M5 postcode in Salford is home to around 15,729 people and is found in the Greater Manchester South West region.

              With average rent at around £1,805, Salford offers an incredible opportunity for investors. Prices are slightly above the average UK house prices index Manchester figures, but with such high yields, it’s certainly worth it.

              Salford, in general, is a goldmine for property with plenty of below-market rates.

              Merchant’s Wharf, for instance, can be bought for 55% below market value and offers huge yields up to 6.5%.

              M38 

              Average House Price Manchester: £132,928

              Average Rental Yield: 10.30%

              Coming in as a close second is the M38 postcode. Spanning the Little Hulton area of Salford, the postcode is found near the towns of Farnworth and Worsley and boasts a population of around 13,549.

              Another Salford postcode on this list, the area boasts exceptionally affordable house prices (the lowest out of all the postcodes) while also having a substantial rental income of £1,141.

              M17 

              Average House Price Manchester: £250,941

              Average Rental Yield: 9.57%

              Spanning Trafford Park, the M17 postcode is one of the pricier areas on this list yet has the third-highest yield out of every Manchester postcode.

              This is thanks to the exceptional monthly rental income of over £2,000. These figures rival any in London and are the highest average you can find in Greater Manchester.

              M14

              Average House Price Manchester: £216,704

              Average Rental Yield: 8.18%

              One of the largest postcodes, the M14 postcode in Fallowfield boasts a combination of affordable house prices and high rental income (£1,477) to solidify it as a top spot for investing.

              With a population of 52,820, there’s plenty of viable tenants just waiting for a top property to become available.

              M11 

              Average House Price Manchester: £143,956

              Average Rental Yield: 6.76%

              With prices significantly below the UK average and the UK house prices index Manchester figures, you can find an exceptional property venture here.

              The M11 postcode spans Openshaw and Clayton Hall and is home to around 20,443 people. Rental income is slightly below the Manchester average, but with sizeable yields of 6.76% and such low prices, it’s hard to go wrong with this postcode.

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              How Does Manchester Compare to the Rest of the UK?

              To help fully grasp just how well Manchester is performing in 2021, let’s look at a few other top UK destinations; London, Liverpool, Birmingham, and Leeds.

              Arguably, the two best property investment hotspots in the UK, Liverpool and Manchester, are in a league of their own.

              With sky-high growth rates and some of the highest rental yields available (upwards of 10%), it’s clear you cannot go wrong with either city.

              Based on the UK house prices index, Manchester edges the competition slightly with higher rental income, past growth, and yields.

              However, with Liverpool offering far lower house prices (35.19% lower, to be exact) and more current regeneration projects, there’s plenty to love from both cities.

              Liverpool prices have increased by a whopping 213.65% over the last 20 years. While this doesn’t compare with Manchester’s astronomical growth rates, it’s clear Liverpool is a city well-worth considering.

              If you want to invest in either city, be sure to contact us today to view all of the latest investment opportunities available.

              To learn more about the Liverpool property market forecast and how it’s performing in 2021, check out our Liverpool Market Report.

              Now, let’s look at the capital of England. The city is internationally renowned, with billions invested each year by foreign investors.

              Currently, London accounts for over one-quarter of the UK’s entire GDP. How can Manchester compare?

              Well, the comparison is a lot fairer than you may think.

              Manchester boasts one of the strongest economies in the UK ecosystem, which has grown twice as fast as London’s since 2014.

              As you may expect, though, rental income and property prices are far higher in the capital.

              Based on Zoopla data, property prices are around 355% higher in London than in Manchester. Rental income is also sizeable at about 155.9% higher, according to statistics from Homelet.

              Due to these premium prices, average London property rental yields dwindle in comparison to Manchester. Average returns for the capital sit at a measly 3.42%, with some areas far below the 2% mark.

              London property prices have also seen smaller growth over the years compared to Manchester.

              Between 2015 and 2020, London prices increased by around 9.92%. However, after reaching a high in 2018, the capital experienced negative growth, dropping by -3.51% between then and 2020.

              This negative growth isn’t the first time the capital has dipped. According to Homelet, rental income in London in 2021 is -3.9% compared to 2020.

              Coupling this with the fact that 13% of people are leaving London for the North, it’s clear that investing in the area is not always the best choice.

              Here you can see a comparison between the two major North Western cities and London.

              London frequently increases and decreases, while Liverpool and Manchester have shown a consistent increase over the last five years.

              It’s unsurprising then that London is poised to see just a 12.7% increase by 2024- the lowest in the UK.

              Comparing this with Manchester and Liverpool, which have the highest growth rates of 27.3%, you can see that London can no longer compare with the Northern Powerhouse.

              Located in the West Midlands, Birmingham has become an increasingly popular option in the property investment world.

              Set to host the Commonwealth Games 2022 and house a major station in the exciting HS2 train scheme, the city’s future looks bright, with billions set to be pumped into the local economy.

              As you can see from the table, both cities are relatively similar.

              While the Manchester property price trend is incredibly high and boasts higher growth rates and rental yields, both cities’ prices are equally affordable, with only a very minor difference.

              The comparisons don’t end there, though. Like Manchester, Birmingham is an incredibly young city.

              Boasting a graduate retention rate of 49%, around 40% of the Birmingham population is under 25.

              While Manchester is undoubtedly the better spot for investment, Birmingham is a city well-worth considering in the future.

              In terms of statistics, Leeds is the closest to Manchester on this list.

              Both cities had an exceptional 2020 for market growth. While Manchester is the fastest growing property market, Leeds finished a close second according to the latest Zoopla data.

              Rent and rental yields are very similar in both cities, although Manchester edges it out.

              Leeds property prices are slightly above the North West city, around £9,000 higher than the average property price in Manchester.

              Following the pattern set by Liverpool and Birmingham, Leeds is also an incredibly young city.

              The Yorkshire city’s population has grown seven times the rate of London in the past few decades, with a massive 151% increase.

              Future growth for the region is also incredibly respectable. Following the strong Manchester property price trend, Leeds is set to see a sizeable 24.1% growth by 2024.

              This growth rate exceeds the national average of 20.4% and is also the third-highest prediction out of all UK regions.

              Again, while Manchester may be the obvious choice right now, keeping Leeds in mind for the future is something worth doing.

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              Invest in Manchester Property Market UK With RWinvest Today 

              We hope you enjoyed our Manchester property market report.

              Manchester is the fastest growing property market in the UK currently, with mega growth over the past few decades.

              With the average property price in Manchester far below the UK average, and yields upwards of 7%, the city offers one of the best investment opportunities around.

              If you are ready to invest in the area and the UK housing market, why not do it with us?

              RWinvest is an industry-leading property investment company specialising in student and residential buy to let.

              We have been crowned the North West Property Business of the Year 2020, and for a good reason, too.

              All of our properties come at significantly discounted rates, with prices up to 55% below market value in Manchester.

              Properties also come equipped with assured rental yields, meaning you are guaranteed to make an excellent investment.

              Contact us today, and don’t miss out on our exciting opportunities. The time to invest is now. Earn huge rental returns in all our investment opportunities today.

              If you enjoyed our Manchester property market report, why don’t you check out our other resources? We cover all the latest property news Manchester, and have several guides exploring the Manchester property market UK. Download your free guides today.

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