Manchester: A Student Buy-to-Let Investment Hotspot?
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Savills Point to Manchester’s Potential for Property Investment This Year
Manchester is called the economic capital of the North and is considered one of the most culturally significant cities in the region. In recent years, it has become known for offering top buy-to-let opportunities in the UK.
When it comes to real estate investment, a recent Savills blog turns the spotlight on Manchester, highlighting the various reasons that Manchester has shown ‘continued resilience’ in the face of a challenging year for the property sector.
In particular, Savills has highlighted the potential of Manchester’s student accommodation market.
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Student Accommodation Likely to be a Top Investment in 2024
Savills predicts that student accommodation is going to be big business in 2024. According to the study, quoting research from StuRents, the number of first-year graduates in the UK is expected to grow to one million by 2030, leading to a shortfall of 450,000 student beds.
Looking at these projections, purpose-built student accommodation seems to be a hot investment commodity with strong demand and high yields in the coming years. There will likely be a flurry of activity in the PBSA market in 2024.
Further Reading: Find out more about various property topics, such as serviced accommodation in the UK, Newcastle investment properties, or the best rental yields in the UK, with our latest guides and insights.
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Why is Student Accommodation in Manchester On the Up?
With so many UK cities famed for their massive student populations, how can investors choose the most advantageous location for a student accommodation investment?
Savills has listed some compelling reasons for choosing Manchester. The city not only attracts a significant cohort of students every year, but they also stay in the city after graduating. Manchester boasts an impressive 50% graduate retention rate, and 32,000 graduates enter the job market annually. This is more than Liverpool, Leeds, and Sheffield combined, three other top options for student accommodation. According to Savills, there may be a rise in co-living schemes aimed at 18-35-year-olds, making more accommodation units available to students and graduates.
The number of students in the city is increasing, with the University of Manchester, Manchester Metropolitan University, and the University of Salford contributing to the population.
Savills isn’t the only one to pick up on this shortage of student accommodation in Manchester and the potential for solid returns as an investor. A report from CBRE called this sector ‘one of the most sought-after real estate markets in the UK’.
How Does Manchester’s Student Market Compare to Liverpool?
Manchester is often compared to its ‘rival’ city, Liverpool, and the two are also considered property investment hotspots.
So how does Liverpool student accommodation stack up to Manchester when it comes to property investment?
As mentioned, Manchester has a bigger student population and a better retention rate than Liverpool. But Liverpool’s student community is still sizable, with several higher education institutions in and around the city, including the University of Liverpool and Liverpool John Moores University, contributing to a student population of around 70,000.
Property in Liverpool is also generally cheaper than in Manchester. The UK House Price Index puts the average Liverpool property price at £177,521, while Manchester is £238,461 (November 2023), making Liverpool property the more affordable choice.
A previous study from Paragon Bank found that Liverpool was one of the top ten best buy-to-let locations in the UK for rental yields for student property, with an average yield of 8.25%, substantially more than the UK rental yield average of around 4-5%.
Both cities have their advantages, but overall, it’s safe to say that the North West is a popular option for property investment in 2024.
Learn more about North West property investment with our buy-to-let area guides covering topics like Blackpool investment properties and buy-to-let property in Burnley.
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