Property Market Manchester 2021 Report

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.

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.

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.

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.