Manchester Property Report 2023

• Average Property Price – £230,967
• Average Monthly Rent – £1367
• Average Gross Rental Yield – 7.10%

Northern cities are generally known for being affordable, and Manchester is a prime example of this trend. Manchester’s average house price is cheaper than the UK average, which is currently £289,824, according to the UK House Price Index.

Although property in Manchester is on the cheaper side, rents have been rapidly climbing. 

The nationwide average monthly rent stands at £1261 according to the HomeLet Rental Index, but the average Manchester rent calculated by housesforsaletorent.co.uk is £1367. With this data, Manchester’s average gross rental yield can be calculated to be 7.10%, which is considered a high yield.

According to the UK House Price Index, the property market has subdued in the past twelve months, and monthly percentage changes have displayed some negative growth in Manchester. This year’s worst month was February, with house prices taking a small dive of -2.2%. Despite these month-to-month dips, the overall trend is towards modest growth when the annual changes are considered.

The worst of the stagnant market seems to have hit London and the South of England, with the North remaining stable. While growth isn’t as rapid as it has been historically in Manchester, the current stunted activity has been characterised by experts as the market correcting itself rather than a slump. It is unlikely to lead to a crash. For this reason, it is believed that Manchester house prices will return to healthier growth over the coming years. Learn more about property prices in the RWinvest London property report for 2023.

So, what’s behind this massive demand for rental property in Manchester?

Firstly, the city has seen substantial economic growth thanks to ongoing regeneration, transforming it into one of the UK’s most desirable places to live. Notable projects include MediaCityUK and Spinningfields, attracting interest and business growth.

Recently, it has been reported that many young professionals are leaving London behind for cheaper rent, more affordable housing and a lower cost of living. Research from the Guardian in 2020 found that 13% of people moving away from the capital chose to live in Manchester. This is 12% higher than the number recorded in 2009, showing a massive and rapid rise in popularity in the past decade. Why not view some of the latest Buy to let properties for sale with RWinvest today!

Another factor contributing to the current explosion in rental demand in Manchester is the student population. The amount of students in Manchester is substantial and growing all the time. This makes Manchester an attractive prospect for student buy-to-let. The area also has a high retention rate for students entering the local job market, adding to rental demand. In 2019, Manchester had the highest graduate retention rate outside of London, approaching 50%.

This could be part of why Manchester is the second youngest area in the country, with a median age of just 31 years old. Around 37% of Manchester’s population is aged between 18 and 34, and people of this age are most likely to rent rather than own a house.

Rental Growth in Manchester 2023

According to Zoopla’s Rental Market Report for September 2023, Manchester is registering one of the highest rental growths when compared with other major cities, running at 14% per annum.

This growth is due to the chronic supply-demand imbalance in the rental market, which can be observed across the country in major cities, not just in Manchester.

It is predicted that Manchester’s population could grow massively in the coming years, exacerbating the supply-demand imbalance and exerting further upward pressure on rental costs.

The good news for buy-to-let investors is that the affordable property and high rents in Manchester have set the scene for some generous rental yields. The average gross rental yield in Manchester is 7.10%, which is considered a high rental yield.

Read our Buy-to-Let Investors Pros and Cons guide for the latest market insights.

Manchester Property Forecast for 2023 and Beyond

The UK property market is currently stagnating, with prices going down in some areas. But London and other regions in the South appear to be getting hit the worst. The North West has experienced modest growth this year, and Manchester has managed to register more of a house price increase than the average for the whole region. This is a promising sign of the resilience of the Manchester property market.

Property experts Savills predict a return to growth for the UK market from 2025 onwards, but it’s unlikely to reach pre-2016 levels of growth. According to their Residential Property Market Forecast, mainstream capital value in the North West region looks set to grow by 11.7% in the next five years.

Source: Savills Research, January 2023

Manchester City Centre is popular with young professionals who want good proximity to their workplace and the excellent amenities that being more central can offer. It’s pricier than many of the suburbs to be found further out, but high rental demand and the prime location can make up for it.

As part of Greater Manchester, Salford is often in the shadow of Manchester City Centre, but thanks to big regeneration efforts like MediaCityUK, Salford Quays, and Greengate, the area has been displaying fast growth and increasing popularity as a place to live and invest. Salford’s impressive capital value increases have made it a top pick for property investment.

Fallowfield is another Manchester hotspot in the buy-to-let field, particularly popular for student accommodation. In some cases, student rental properties can be much more profitable than residential properties, which may contribute to the high average rental yield observed in Fallowfield.

Source: Average property prices taken from Rightmove, average monthly rents taken from housesforsaletolet.co.uk. Gross rental yield estimates calculated with these figures.

Suburbs such as Harpurhey and Little Hulton in Greater Manchester are known for having particularly cheap property, much lower than the national average. For example, according to Rightmove, Harpurhey has an average price of just £145,483. However, these districts are some of the most deprived parts of Manchester, and social problems could make this area less attractive to potential tenants.

In our latest buy-to-let overview, you can learn more about the best 2023 cities to invest in real estate.