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.
|Year||2023||2024||2025||2026||2027||Five years to 2027
|Mainstream Capital Value Forecast for the North West||-8.50%||2.50%||4.50%||7.50%||6.00%||11.70%
Source: Savills Research, January 2023