The growth of Manchester as the place to be for buy to let property investment continues unabated. The Northern Powerhouse city is continually proving itself and showing its incredible potential on the national and international stage.

Hot on the heels of being deemed the UK’s most liveable city (and the world’s 35th most liveable city), Manchester has rightly earned its place as, and moniker of, the UK’s second city.

For property investors both domestic and from overseas, Manchester has become an industrial strength magnet for buy to let property investment. The Manchester buy to let market is booming and only displaying signs of more growth and strength on a global scale. As London’s property market sags under its own weight, Manchester’s has grown rapidly. Buy to let investors have made great use of a city desperate to transform and present itself to the world in a new light. Much like Liverpool, its North West neighbour, Manchester has sprung up with low average house prices, high rental yields and positive capital appreciation projections that have turned the heads of property investors.

Manchester Investment

The latest property price index figures put Manchester at the top of the UK’s 20 largest cities. Capital appreciation growth for the 12 months to the end of June 2018 came to 7.4% against the national average of 4.6%. Manchester’s growth is in stark contrast to London, a city beset by the perils of becoming too big and unwieldy for its own good. Over the same 12-month period, London’s capital appreciation grew by 0.7%; one of the smallest figures in the country.

During the first half of 2018, sales of residential properties in the city grew by a rate of 56%. With that, house prices across the year are set to grow by 6.5%; a figure that is head and shoulders above the national average of 3%. Further growth of 22.8% is predicted in the next four years.

Moreover, the average price of a two-bedroom flat rose by 8.7% through 2017 with rents climbing by 3.2% during the same period. Rental rates are expected to increase by 40% more than the UK average by 2022.

Bridgewater Wharf is the viability of Manchester as a premium buy to let investment opportunity is given credence by the incredible surge in population density in and around its city centre. Manchester city centre’s population has grown by an almost unbelievable 7,000% since the turn of the century.

Manchester House Prices

The numbers don’t lie and for all of Manchester’s incredible growth, it has not priced itself out of the market. It remains the most attractive buy to let investment destination in the UK. The average house price in Manchester is a low £163,300. Over 200 miles away in London, the average is a startling £491,200.

The low prices in Manchester’s buy to let market have proved attractive to overseas investors, who see the North West city as the most enticing place to invest in the UK. Direct foreign investment from China has propelled a large part of Manchester’s buy to let property market. Chinese investors have been acquiring such properties in the city at an incredible rate, such is their enthusiasm to become financially involved with the region.

January 2018 saw a steep increase in enquiries into Manchester buy to let property. An incredible 256% rise in Chinese interest was recorded against the previous January. Market data suggests that a Chinese property investor will look to spend an average of £223,000 per property purchase.

The buoyant buy to let investment market in Manchester is strongly aided by the city’s purpose-built student accommodation (PBSA) market. Student developments in Manchester are the backbone of its buy to let market and investors are encouraged by the sector as a solid platform for growth, prosperity and profitability.

Manchester Studio Apartment

Manchester already has 24,000 student bed spaces, but the need for more, the constant demand for new student developments and living spaces, is driving the perpetual motion of Manchester’s buy to let economy. The demand far exceeds the current supply, and investors who make forays into Manchester’s buy to let market will be met with a clamouring demand from a seemingly limitless roll call of potential tenants.

In 2017, the price of en-suite student bedrooms rose by 3%, while studio apartment rents increased by 5% over the same period. For investors, who will find Manchester sporting much lower entry costs than other parts of the UK, the opportunity to take advantage of such auspicious economic factors is impossible to deny and refuse.

Manchester has not only seen its student numbers swell exponentially. It is already starting to reap the benefits of high student retention. A larger proportion than ever of undergraduate and postgraduate students who attend any of the Greater Manchester universities are staying in the region to live and work after they graduate.

In 2014/15, Manchester boasted a 51.5% student retention rate, the second highest in the UK after London. Manchester’s percentage is higher than other popular cities and institutes such as Belfast (50%), Birmingham (49%) and Edinburgh (42%). Early estimates for 2018 show that figure rocketing to 70%.

Students equal profit for Manchester’s buy to let investors. The city’s M14 postcode, covering two university campuses in the city, is one of the country’s best performing student rental yield areas. At 10.08%, investors will find another surfeit of potential tenants and returns that are very rarely matched in other sectors and industries.

M14 enjoys the distinction of being the home of Manchester Metropolitan University and two campuses of the University of Manchester. At an average of £194,733 for each property in this specific postcode, buy to let investors can be assured of high demand, high numbers and, most importantly, consistently high rental yields.

M19, a postcode that covers popular student areas Levenshulme, Burnage, Heaton Mersey, Heaton Chapel and Reddish, is another top ten area for high rental yields in the UK. With an average yield of 8.6% and a low average house price of £185,645, investors will be heartened by the potential on show.

Low student rental yield

Manchester also provides a welcome home to return to, with 60% of students who leave the city for higher education returning to reap the benefits of a growing economy, myriad opportunities for employment and an affordable cost of living.

Such figures are a real blessing for buy to let investors. Young professionals and graduates make up the majority of ‘Generation Rent’. This demographic is eschewing the traditional ideas of taking out a mortgage and owning property, instead preferring to stay flexible and footloose with rented accommodation in vibrant, growing city centres.

For those of you involved in the buy to let property investment market, Manchester really is the place to put down your marker. The stars have aligned for this great and historic city; its future as an economic powerhouse and investment utopia are assured. Once all the factors have been considered, it is impossible to deny. Low entry costs, high rental yields, a massive city centre populace festooned with students and young professionals and the promise of further growth and profitability; how could you *not* want to invest in Manchester?

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