North West Is Home to Most Popular Buy-to-Let Location

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Buy-to-Let Landlords Looking to Manchester to Expand Their Portfolios

A new study has revealed which area of the UK is most popular with buy-to-let landlords building a property portfolio.

Paragon Bank analysed its lending data and identified the top 10 locations where landlords owning four or more properties are investing. The analysis revealed that in 2023, Manchester’s M14 postcode stood out as the preferred choice for buy-to-let landlords.

M14 covers Fallowfield, Rusholme, Old Moat, and Ladybarn districts in Manchester, positioned between the University of Manchester and Manchester Metropolitan University. Landlords are drawn to this area due to its sizable student population, with potential rental yields reaching up to 7.5%.

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Why Landlords Look to the North West?

The North West is one of the most enticing regions for UK property investment, touted by industry experts as one of the higher-yielding areas with excellent capital growth potential. As such, it should not be surprising that this Manchester location sits at the top of the Paragon Bank overview of popular buy-to-let locations.

The North West has much more affordable properties than many other UK places. HM Land Registry’s UK House Price Index puts the average North West property price at £215,082. As of January 2024, the average UK house price is £281,913.

In addition, the HomeLet Rental Index puts the average rental price in the North West at £1,024, giving the region an average rental yield of 5.71%, higher than the national average.

Regarding the North West buy-to-let market, landlords may see returns of 9.2% over the next year in certain locations, as per the most recent Savills cross-sector forecast. In addition, Savills predicts that the North West will see capital growth of 20.2% over the next five years. In comparison, the UK is only expected to see growth of 17.9%.

These figures position the North West as an area ripe for property investment, mixing good-value properties with long-term investment prospects. So, if you’re investing in Manchester property, you could see some positive results.

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Where Else Should Landlords Consider in the North West?

If you are a buy-to-let investor considering purchasing property in Manchester, you may first want to look across the M62 at Liverpool, particularly if you’re looking for good-value investments.

A recent Shawbrook Bank study showed that one-quarter of landlords see city apartments as a lucrative investment, especially with people returning to work and wanting a convenient home close to the office.

Luckily, both Liverpool and Manchester have their fair share of city centre off-plan developments available to investors. These properties are placed in advantageous areas that appeal to young professionals and students due to their proximity to things like universities, offices, transport links and local amenities. While M14 is popular with buy-to-let landlords looking to target the Manchester student population, investors in Liverpool can buy into these properties in student-friendly areas such as the Knowledge Quarter and Baltic Triangle.

However, Liverpool is significantly cheaper than Manchester, at least in terms of property prices.

HM Land Registry puts the average Liverpool property price at £176,371, while Manchester is more expensive at £249,633. Both cities have an average price lower than the UK average, but Liverpool is significantly more affordable. In addition, Liverpool also boasts a superior average rental yield of 7.44% (per Zoopla).

Want to know more about North West property investment? See our North West buy-to-let area guides:

Author

Dale Barham

Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.