Manchester Property Market Forecast For Strong Growth in 2021
After a fantastic year in 2020, the future is looking bright for Manchester. The northern powerhouse is set to see some incredible growth rates over the coming years, solidifying its position as an investment paradise. If you want to learn more about what to expect over the coming 12 months and beyond, keep reading this Manchester property market forecast for 2021.
For many years, the Manchester property market has been recognised for several qualities.
With a thriving music and cultural scene, world-famous sports teams, and globally renowned universities in the heart of Manchester, the city stands out as a top UK destination.
One area in which Manchester is a cut above the rest is with its property market, with the Manchester property market offering plenty of potential for UK investments.
Having grown significantly over recent years, Manchester property market forecast predictions show that the success of investments in the city is set to continue throughout 2021 and beyond.
This investment guide will explore current house price trends, looking at how the housing market in Manchester will continue to grow and why now is the perfect time to consider investing in this top UK city.
Keep reading to find out more about the latest UK property price forecast and UK house price forecast 2021.
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Manchester Property Market Forecast 2021 and Beyond
When it comes to property growth, there is no better location than Manchester.
The North West city has dominated growth charts over the last 20 years and has surpassed every other major UK city.
But can this growth continue into 2021 and beyond?
Let’s look at what the industry experts anticipate for the Manchester property market and the wider UK market with the latest Manchester property market forecast 2021 and the UK housing market forecast.
Manchester Property Market Forecast 2021: Property Price Predictions
According to the latest Savills housing market forecast, the North West region is expected to see some of the strongest growth in 2021 and beyond.
Over the next 12 months, Manchester property prices and the wider North West area are set to see a property growth of 4.5%.
This is one of the highest predictions in the UK and is higher than London, the North East, Wales, Scotland, and the UK average.
In fact, only the South East, East of England, and South West are set to have a better 2021 than the North West region, with predictions of a 5% growth over the coming 12 months.
Notably, while the North West and the Manchester property market may not have the standout 2021 compared to others, the following four years are set to be incredibly transformative for the region.
By 2025, Savills has predicted that prices in the Manchester area will increase by a whopping 28.8%.
This overall price growth in the UK housing market forecast is the highest in the UK, with only Yorkshire and The Humber coming close with a 28.2% prediction.
Over the next four years, you can expect a consistent and strong price growth that surpasses any other UK region in Manchester.
In 2022, prices in Manchester will rise by a whopping 6%, with an additional 5.5% growth in 2023. This level of growth is set to continue in 2024 with another 5.5% growth, before finally rising by 4.5% in 2025.
These growth levels far surpass other UK predictions. They are a staggering 7.7% higher than the UK property forecast predictions for the entire country.
The average UK property is expected to rise by 21.1%.
As you can see from the UK house price forecast, the house price trend is that the North West will see the highest growth levels over the coming years.
In fact, most northern locations dominate the house prices forecast, signifying a wider trend of the south increasingly becoming worse for property investment potential.
Manchester Property Prices in 2021
Notably, the UK property forecast from Savills, which was released in March 2021, is aimed specifically at UK regions.
While this is a strong indicator of what will happen in major cities within these regions, like Manchester and Liverpool, it’s likely that Manchester will outperform these figures.
Manchester has already had a solid start to 2021.
The latest UK House Price Index figures compiled by the Land Registry account for the first three months of 2021.
Here, Manchester prices have already seen substantial growth levels.
In January 2021, it was recorded that house prices in the Manchester property market were valued at £202,985.
In just one month, prices increased by almost £3,000, with a February 2021 average of £205,256.
Up to the latest figures, the average Manchester property price is now £211,107, a 2.85% increase over February and a staggering 16.23% higher than March 2020.
Overall, in these three months, Manchester prices in 2021 have increased in value by 4.00%. That’s already close to the Savills North West prediction for the entire year!
This level of growth was seen throughout every Manchester property type, with terraced houses increasing the most.
Overall, when it comes to property prices, the Manchester property market is set to see strong and consistent growth over the coming years.
Manchester Property Market Forecast 2021: Rental Market Predictions
The Manchester forecast for rent is equally as optimistic as the house price forecast for 2021.
Savills has predicted that rent across the UK will increase by a sizeable 17% by 2025, set to be in line with rising incomes.
Already in 2021, Manchester and North West rent is surpassing the wider UK average.
According to the Homelet Rental Index, as of April 2021, North West rent has increased by 6.3% year-on-year.
In comparison, the average UK rent has increased by just 2.9%.
Meanwhile, rent in areas like London is dropping, with the capital seeing rent decrease by a staggering 5.3%.
Currently, on Zoopla, the average Manchester property commands monthly rental fees of £1,104.
This means Manchester rent is around 29.43% higher than the average UK rent, excluding London.
If you’re a landlord or investor, you can expect to earn around £13,248 on a single Manchester property without factoring in taxes or costs.
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Manchester Growth 2020
To give some context behind the growth rates anticipated for Manchester, it’s essential to understand what happened to the UK property market in 2020.
At the start of the year, predictions were strong for the UK.
Savills provided a house price forecast 2020, which said that there would be a 15.1% increase in UK house prices by 2024.
The overall feeling in the UK property market was that growth levels were set to be high after Boris Johnson’s landslide electoral victory in December 2019.
No one could have expected what was to follow, though, with the country hit with an unprecedented lockdown after the rise of the coronavirus pandemic.
Doom and gloom started to be shared about the property market, with activity in property essentially ending overnight in March 2020.
However, despite these claims, the market started to thrive across the UK.
After the first initial lockdown period, and as real estate agents were allowed to sell again, property interest surged across the UK.
As of July 2020, Savills found that property interest had increased by 60% compared to the 12 weeks prior to lockdown.
These growth levels have been so high in the UK that Savills have revised their predictions twice in line with the huge capital growth.
In September 2020, Savills updated their house price forecast 2020 and predicted that house prices will rise in the UK by 20.4% by 2024. In March 2021, the property experts updated their house price forecast 2020 predictions again, with prices now set to rise by 21.1% by 2025.
These huge growth levels were mirrored in the Manchester market, which saw significant house price growth over the 12 months in 2020.
The trend shown in Manchester is almost identical across every property type.
While there was an initial dip in the first six months, house prices start to see a strong increase over the latter part of the year.
The average Manchester property initially started at £182,906 before rising to £200,242 in December 2020, a percentage increase of 9.48%.
For comparison, in the same period, the average UK property increased by 7.73%, while properties in the city of London increased by just 2.63%.
This growth level also exceeded many other UK cities.
From the data in the table, you can see that Manchester exceeded the growth rates of every other major UK city except Liverpool, a reminder that the North West has seen the highest growth rates in recent years.
With prices rising so high in 2020, these growth rates will likely continue in the coming years.
Manchester Growth Last 5, 10, 20 years
When looking at future growth potential, it is often good to look at how property prices have performed in the past.
For instance, if there has been consistent growth over the last 20 years, it is a strong indicator that you can expect further development in the future.
Over the last five, 10, and 20 years, Manchester property has seen consistent and considerable growth.
Manchester Forecast 2016 to 2021
The last five years have been a difficult period for the UK economy.
With uncertainty sweeping the nation from Brexit, and the Covid-19 pandemic in 2020, you would imagine property prices struggled between 2016 and 2021.
However, Manchester property has increased in value massively over the years.
As you can see from the graph, Manchester prices have increased considerably over the last five years.
Between 2016 and 2021, prices have increased in the North West city by a mammoth 42.90%.
In the same period, the average UK property increased by only 23.47%.
These growth levels for Manchester were also astronomical over a 10-year and 20-year period.
UK Property Forecast 2001 – 2021
To help demonstrate the level of growth seen in Manchester, let’s compare how the city has performed against other UK property destinations over 20 years.
You can see that Manchester has dominated house prices growth over a 20 year and five-year period.
In fact, the only period Manchester doesn’t lead is over 10 years, with London narrowly beating the Northern Powerhouse.
Notably, though, London has seen incredibly mediocre growth rates over the past five years, with house prices rising past the realms of affordability.
Overall, the Manchester forecast has seen prices rise considerably over the past 20 years, making the city one of the premier destinations for property investors looking to make strong capital gains.
Why Are Manchester Property Prices Rising
We’ve established that Manchester prices are rising far higher than almost every other top UK destination.
But why has this been the case?
Manchester has seen a wealth of changes over the past 20 years, with tonnes of inward investment leading to a huge spike in population and rental demand.
The city of Manchester and the wider Greater Manchester area has seen some staggering levels of investment over the last 20 years.
In 2018, Manchester had the second-highest number of foreign direct investment projects, according to Statista.com.
Billions have been spent rejuvenating the region, with notable projects like Spinningfields and MediaCityUK attracting some of the best businesses in the UK.
As the city becomes more attractive to live in, and as more job opportunities arise, the population in turn rises.
This has a marked impact on the housing market, with more demand for properties causing prices to rise.
Manchester is one of the top UK destinations for regeneration, and there are plenty of projects ongoing in 2021 and beyond.
For an in-depth look at Manchester regeneration, check out our brand-new UK regeneration guide.
Population Growth Boosting Rental Demand
One element of the Manchester property market, which stands out to investors compared to other cities in the UK, is its rental market.
Manchester attracts high levels of demand from a range of tenants, particularly young professionals and students.
When it comes to property investment, rental demand from these types of tenants is critical.
By investing in an area with a lot of demand from this demographic, investors can benefit from some of the best rental returns and ensure they reduce the chances of any void periods.
Manchester property market forecast predictions reveal that throughout 2021 and beyond, the city’s rental market is set to flourish even further.
Since 2017, there has been a noticeable trend of people choosing to move to Manchester, often leaving behind other UK cities like London.
Research by Buy Association states that in Summer 2019, Manchester saw a rise of 117% in the number of people moving to Manchester than the previous year.
This continued in 2020, with The Guardian finding that 13% of those leaving the capital choose to live in the North of England. This is 12% higher than it was in 2009.
Currently, Zoopla estimates that the current ratio between available rental supply versus demand sits at a staggering 1:5, showing just how big the rental market in the city is.
According to a report by Manchester City Council, by 2025, Manchester’s population is expected to reach more than 635,000.
With the city’s population standing at around 534,745 in 2018, these predictions show that the Manchester property market forecasts a significant boost in rental demand, encouraging investment even further.
The population, in general, has increased massively over the last 30 years.
In Manchester news from 2020, a report found that the population of Greater Manchester is now 2.8 million, an increase of over 280,000 since 1991.
Likewise, the city of Manchester now has a population of over half a million, which is a 27.8% rise since 1991.
More and more people are becoming attracted to the city due to the opportunities on offer.
Notably, for investors, a big bulk of this population is young.
Around 37% of the population of Manchester are aged between 18-34, with a massive increase in the population of students.
Younger people are more likely to rent, which is a good sign for the future of the Manchester property market.
Manchester Business Scene Propelling Student Population
Manchester has always stood out for its business scene.
The Spinningfields development, located in the heart of Manchester, essentially introduced a new area to Manchester City centre, and created top-quality office space.
The city is now home to some major UK companies, many of which residing in Salford’s MediaCityUK, such as the BBC and ITV.
Manchester, along with Liverpool, was ranked in the top 10 global emerging ecosystems for business start-ups in 2020, ranking ahead of places like Dubai and Lyon.
With more and more business opportunities expected to open up in Greater Manchester, introducing plenty more office space, and delivering around 15,000 jobs, larger amounts of young professionals are being drawn to the city, which will inevitably drive demand further.
The city is quickly becoming one of the top property hotspots with affordable rental prices.
Manchester is incredible for the student population, making it one of the top property hotspots for student properties.
Thanks to standout universities like the University of Manchester, the city has become globally recognised for its business and education expertise.
It currently has the largest student population in Europe and has over 17,000 international students.
It also has one of the best graduate retention rates in the country at 51%.
This means more students than ever are staying after graduating to continue their studies, thanks to the fantastic opportunities offered here.
Due to these figures, it may be a good idea to consider student properties, which offer some of the best yields in the country.
When you look at statistics on Manchester’s population and job market growth, it becomes even more apparent why this Northern gem is the UK’s fastest-growing city and is currently the largest regional economy outside London.
The number of people living in Manchester reportedly grew by 149% from 2002 to 2015, while between 1998 and 2015, employment opportunities grew by 84%.
If you’re thinking of investing in the housing market, Manchester will be an excellent choice for 2021 and the coming years.
Strong House Price Growth With Affordable Property Prices
All of the latest UK property market forecasts show that property prices and rental prices will continue to climb in 2021 and beyond.
This is especially true in Manchester. Property in Manchester is experiencing a high level of capital growth.
On many occasions, the Manchester property market has been highlighted for its house price growth compared to UK property in other areas such as London.
At the end of 2018, Manchester house prices were found to have grown faster than any other UK city.
This growth continued in 2019 and 2020 and will no doubt continue to do so in 2021. To see the latest data in the Manchester market, check out our brand-new Manchester property market report for 2021.
Savills house price forecast has predicted that North West houses will increase in value by over 28.8% by 2025.
That is 7.7% higher than the average UK property price and higher than anywhere else in the country.
The city is perfect for both buyers and renters.
With UK house prices rising so rapidly, investors would be wise to snap up opportunities in the Manchester property market as soon as possible.
This way, it’s possible to take advantage of the current affordable prices on offer while benefiting from maximum capital growth over time.
By investing in off-plan property in Manchester, this potential growth becomes even higher.
Off-plan properties come with the added advantage of below-market prices, allowing the chance to invest in Manchester property at a lower cost than usual.
According to Zoopla, the average price for a property in Manchester stands at around £243,088 in May 2021.
While that’s still lower than the UK average, off-plan property makes it even more affordable.
With off-plan investments like our waterfront Merchant’s Wharf property, prices are up to 55% below market value.
To top off these affordable rates, off-plan also comes with the possibility of heightened growth.
This is because, by the time the property is complete and ready for tenancy, it could have already increased in value.
Manchester Property Market More Affordable Than London
The Northern Powerhouse and various northern cities currently beat the capital in both prices and rental growth.
While many investors traditionally view the capital as the best place to buy property, in 2021, this is not the case.
The North West is currently the king for property investment and investment property. This is, in part, because the city is vastly more affordable than London.
According to the latest Zoopla data, the average London house price sits at an eye-watering £935,301.
In comparison, Manchester sits at a far more reasonable £243,088. These prices have a considerable knock-on effect on property investors and rental yields.
As you may expect, London has incredibly high rent, which is currently £2,646 per month on average, according to Zoopla.
Homelet estimates that the average London house price is around 90% higher than the rest of the UK.
However, the city’s property is on a downward spiral.
In April 2021, Homelet found that London rent had dropped by 5.3% compared to April 2020.
On the other hand, rental growth in the North West had increased by over 6.3% compared to the year prior.
These figures paint a very gloomy picture of the capital.
As it stands, London’s rental yield is around 3.39% on average, with some estimates putting it at as low as 2%.
On the other hand, Manchester has rental returns of nearly 5.45% on average on Zoopla, with UK House Price Index data placing this average closer to 6.28%.
All Manchester property news and UK property forecast suggest that the Northern Powerhouse is fast becoming the ideal spot for property investors, and more people than ever are likely to continue to move to the north of England.
Overall, Manchester is one of the best investment opportunities available, like other northern cities.
From student properties to residential properties, there are tonnes of opportunities to get onto the proper market.
And with forecasts suggesting that prices and rental growth will continue, and with the stamp duty tax holiday soon ending in June 2021, now is an excellent time to start investing.
Invest in the Property Market Manchester With RWinvest
We hope you enjoyed our detailed guide to the latest property forecast in the UK.
The UK property market forecast is incredibly exciting for the future. The property prices forecast is particularly exciting for those looking to make a major profit on their property purchases.
If you’re interested in the latest house price trend and want to take advantage of the oncoming growth in the Manchester property market, be sure to look at our available new build Manchester investment opportunities.
We choose only the best properties in top Manchester postcodes to ensure our clients get the most out of their investment.
For high returns and significant growth in one of the UK’s most promising investment cities, contact our expert sales team today.
For more Manchester property news and information on the latest UK property market forecast, be sure to check out our free investment guides on hot topics like stamp duty.
If you’re ready to start your property investment journey today, be sure to contact our property specialists now.
Our teams can guide you through all the latest options, with prices starting from just £92,950 with massive 8% returns available.
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Disclaimer: This guide was updated in May 2021. All statistics displayed are likely to change and may no longer be accurate once you read.
Salford Waterfront Apartments
Up to 6.5% Projected Rental Return
55% Below Market Value
Luxury M3 Investment
All-New Manchester Development
5% Projected NET Rental Return
City Centre Location