Manchester Property Growth – How is the Manchester Housing Market Performing?

To start with, let’s look at some information on the Manchester property market.

In the last few decades, the Manchester housing market has experienced some fantastic growth and now sits as one of the premier property destinations in the UK.

In the following section, we will take a look at the current market statistics in the Northern Powerhouse, such as the average house price in Manchester, how much it costs to live in the city, and how Manchester property prices compare to the rest of the UK.

To see more information on how the city is performing as of 2023, be sure to check out our latest Manchester property market report.

Manchester house prices by area can heavily fluctuate.

Greater Manchester is a diverse area, with varying price levels on offer.

How Do Manchester Property Prices Compare to the Rest of the UK?

Manchester property prices are highly affordable when compared to other major cities in the UK.

House prices in Manchester are cheaper than those in London where the average is £739,288, Leeds which has an average of £256,028, and Bristol with an average of £394,145.

Liverpool is one of the only other major UK cities where property prices are lower than Manchester, at £177,803 on average according to the UK House Price Index 2023.

This is around £53,823 cheaper than the average property price in Manchester.

Rental yields are one of the most important aspects of property investment, and shows the percentage return on investment earned through rent. It’s calculated by dividing the yearly rental income by the purchase price and multiplying by 100 for a percentage.

Generally, rental yields between 5 and 6% are good, highlighting the regions strong performance.

In fact, the UK as a whole is only generating average rental yields of just 5.11% in 2023.

Notably, these rental yields are just the average.

Based on Zoopla data, you can find returns up to 10% in Salford’s M5 postcode.

Of course, rental figures also change depending on what property type you invest in.

In the property world, prices for both homes and rent tend to increase with rising demand, and there isn’t a city in the UK with such high demand as Manchester.

A study from Zoopla in 2020 found that the ratio between supply and demand of properties in Manchester was a staggering 1:5.

A major reason for this colossal demand is the ever-expanding population in the city.

Between 2006 and 2016, the population of Greater Manchester grew by an astonishing 7.7%, which was double the growth rate of the rest of the UK.

This growth rate was seen in Manchester, too, with a 27.8% increase in population size since 1991.

A bulk of this expanding population is from young people.

Manchester is one of the definitive student cities. Featuring the largest student population in Europe, the Northern powerhouse features over 100,000 students across five top universities.

Notably, while students are choosing to live in Manchester for their education, they also choose to stay after their studies, with the city having the second-highest graduate retention rate in the UK.

Over 51% of students choose to stay and work in Manchester after graduation thanks to the fantastic living experience and business opportunities on offer.

Manchester population growth contributes a lot to house prices in the Manchester property market.

The more people that live in Manchester, the more demand there will be for properties, which leads to significant growth in Manchester property prices due to insufficient supply.

While a higher population means an increase in house prices in Manchester, it will also cause the average rent in Manchester to rise.

This is good news for buy to let investors, resulting in a boost in the already high rental yields in the area.

This means that if an investor is able to purchase a below market value property in Manchester, they’re likely to generate some impressive rental yields due to the consistently high cost of rent in the city.

Another considerable factor that helped promote continued growth in Manchester and the rest of the UK despite the impact of Covid-19 has been the stamp duty tax holiday.

Stamp duty is a tax paid when you purchase a property in England and Northern Ireland. It has a different name in Scotland and Wales, with different rates, but the principle is still the same.

While Covid-19 called into question the stability of the UK economy, the UK chancellor cut tax rates for stamp duty tax to help promote continued activity in the real estate market.

This worked to great effect with property purchases continuing throughout the year.

On average, investors were able to save £4,500 on property purchases, with some able to save up to a whopping £15,000.

If you want to learn more about stamp duty, be sure to check out our guide and use our stamp duty calculator to work out how much money you will pay on your next property purchase.

Manchester Property Prices 2020 

Firstly, let’s take a look at how house prices in the Manchester region behaved in 2020.

Despite the impact of two national lockdowns over the 12 months, Manchester house prices saw a fairly consistent level of increase given the circumstances.

As you can see, while there was a consistent dip between March and June 2020 during the first lockdown, prices quickly recovered, and sky-rocketed between June and August by a whopping £19,690 or 11.42%.

Overall, from January to December, the Manchester average house price increased in value by 9.05%.

For context, the UK average increased by 7.60%, while London increased by just 3.77%.

While we’re still not completely out of the dark with the Covid-19 pandemic and the effect it will have on UK-wide and Manchester property prices in 2020, it appears that the resilience of the UK and Manchester housing market is helping to keep things afloat.

Manchester property news suggests that the market is already showing signs of recovery, and once the situation has improved significantly, the property market is expected to soar further through 2021 and beyond.

Predictions for the Manchester property market forecast suggest that property prices in Manchester will continue rising for many years to come, despite any minor falls in value along the way that we might experience.

Investment Levels Remain Strong

If one thing is for sure about the Manchester property market in 2020, it’s that levels of investment interest in Manchester and many parts of the UK have stayed strong.

With property market activity experiencing a slow during the height of the Covid-19 pandemic, many investors were able to get a good deal on buy-to-let investments, with lower-than-usual Manchester property prices available.

A lot of developers introduced discounted rates for their properties as a way to entice investors, while the stamp duty tax holiday enforced in July meant that investors could make huge savings on buy-to-let purchases.

This has allowed buyers to secure a below-market value property in Manchester or an off-market property in Manchester in 2020.

Manchester Property Prices 2019 

Like 2020, 2019 was an incredibly unstable economic year.

A dark cloud persisted over UK politics, with the uncertainty of Brexit and the question of who should run the country.

Such uncertainty was seen directly in house prices over the course of 2019.

As you can see from the graph, house prices between January and July remained fairly consistent, with slight peaks and troughs throughout the six months.

Property prices started to rise from July onwards, although growth levels were minimal.

Between July and August, house prices increased by just 1.85%, with an overall increase in the year of only 3.31%.

However, after the December 2020 election, which saw stability return to UK politics with a strong conservative majority, house prices increased in 2020.

A similar trend was seen in the wider UK market, with average UK house prices increasing by only 1.52%.

This again highlights Manchester’s continued trend of outperforming the wider UK market.

Manchester’s average house price increase in the last 10 years – from 2011 to 2021 – was 67.97%, according to data from House Price Index.

That results in an added value of around £80,625 onto the Manchester average house price.

This percentage goes to show how much the average house price Manchester generates has grown yearly and hints at similar growth in the future.

Looking back further still, between 2001 and 2021, the average house price in Manchester was just £44,813.

That means prices in the last 20 years have increased by a staggering 344.59%, or an added value of £154,422.

From 2003 to 2023, Manchester prices increased by 288.41%, further illustrating this growth.

London’s capital growth, in particular, has been incredibly poor over the last few years. While the growth rates over 20 years are some of the best in the UK, prices over the last five years have decreased by a staggering 11.79%.

London has traditionally been seen as the premier property destination in the UK.

When you look at London house prices graph over 10 years, you can see why this was initially the case.

Between February 2013 and February 2015, house prices skyrocketed by a whopping £261,343.

However, capital growth rates have dropped drastically as house prices gained value.

From the February 2019 peak of £894,520, prices dropped by £291,211 to £675,309.

That is a percentage drop of -24.51%.

If you’re interested in the best capital growth rates, Manchester is the prime location.

The Manchester property market forecast suggests that Manchester house prices will continue to grow.

By 2027, Manchester property prices are to increase more than any other location, according to Savills.

Manchester and the North West region as a whole are expected to rise dramatically with a boom of 11.7% by 2027.

This suggests that along with Manchester property prices, the other key North West city of Liverpool is set to experience some attractive house price growth.

These are some of the highest levels in the UK, with only Yorkshire and The Humber close, with similar growth rates.

Manchester is a complex city, with plenty of thriving areas worth investing in.

To help you work out what the best places to invest are, we have listed some of the top up and coming areas Manchester wide.

1) Salford

Average property price: £238,502

Average rental yield: 7.46%

Perhaps one of the best up and coming areas Manchester is Salford.

The area has been transformed over the last decade thanks to significant regeneration efforts and continues to grow and thrive.

One of the major attractions to Salford is the fantastic MediaCityUK.

First opening in 2007, the area was a massive regeneration effort that has since attracted some of the biggest names in the media business like the BBC and ITV.

Other regeneration zones like Greengate Salford Manchester, home to our new property investment opportunity Embankment Exchange, are gaining attention from investors.

With Salford just a five minute walk from Manchester city centre, and massive growth expected in the coming years, the city has a tonne of potential and is worth keeping an eye on.

2) Wigan

Average property price: £167,011

Average rental yield: 6.14%

Another of the best up and coming areas Manchester that often goes under the radar is Wigan.

Located to the northwest of Manchester, Wigan is one of the most affordable locations for investors and residents alike.

Monthly rent here is just £855, with property prices starting at only £167,011, according to Zoopla.

These incredibly low prices give ample opportunity for growth, with the likelihood of more and more residents moving to the area to take advantage of the low prices.

While it isn’t the best investment location out there, it certainly has the potential to thrive and should be monitored closely.

3) Tameside

Average Property Price : £209,467

Average Rental Yield: 4.41%

Found to the east of Manchester is Tameside.

Again, like Wigan, Tameside is fantastically affordable with prices under the £170,000 mark.

Rent here is valued at just £770 a month, with the potential to earn almost 5% returns on your investment.

Like Wigan, these incredibly low prices make the likelihood of growth incredibly high, with prices already increasing by 8.64% over the past 12 months.

Tameside is certainly one of the best up and coming areas Manchester, and should be kept in mind by investors for the future.

4) Manchester city centre

Average property price: £248,083

Average rental yield: 8.84%

You may be surprised at its inclusion on this list, but the reality is Manchester city centre has so much more room to grow despite already being established as a thriving property location.

Capital growth and rental appreciation in the city centre is like no other in the UK.

Plus with one of the youngest average tenant profiles, the room to grow is off the charts.

The future is incredibly bright for the Manchester region and if you want to invest in one of the best up and coming areas Manchester that is already thriving, then the city centre is the ideal spot for you.