Manchester is widely recognised as a second city behind London, with a seemingly mass exodus heading away from the country’s capital. This is securing the northern city as one of the most thriving hotspots for tourism, culture and investment in off-plan developments. Young professionals are enticed into the area through the astounding employment prospects, pushing the demand for Manchester off-plan developments. The city is experiencing the fastest economic growth outside of London, and therefore solidifying itself as a fruitful area of unparalleled opportunity, with more students, graduates and investors seeking off-plan Manchester. As a leading UK city, Manchester looks set to embark on an extremely prosperous future and secure a name as one of the UK’s top rental locations.
Why Invest in off-plan?
Investors considering off-plan developments understand that investment from government initiatives, local authorities and businesses are a vital component for Manchester to perform to its true potential. In this regard, Manchester doesn’t disappoint and holds much promise for the future. Investment in Manchester off-plan is set to flourish as the city holds one of the most proactive investment strategies in the UK. Plans for regeneration across the city have strengthened the desire to invest in Manchester off-plan, which will have an advantageous effect on property prices in the area.
Purchasing Manchester off-plan property enables landlords and investors to obtain luxury properties in convenient locations before they reach their optimum price. Off-plan developments stand as an appealing option for investors due to the discounted purchase price, compared to the higher value of a completed project. Those who purchase off-plan developments will benefit mostly from house price growth. For example, if a property was purchased in 2016, but due for completion in 2018, when the property has been built, there will have been an accumulation in value each year. This can add immense value to a property over the long term, especially if it had already been purchased at a discounted price. This presents an invaluable investment opportunity in Manchester city centre.
Additionally, purchasers are able to secure a property whilst construction takes place. During construction, the value of an investment, especially in sought after locations where the property market is strong, can increase exponentially. Therefore, this maximises profits as the potential for capital appreciation is much higher than buying a traditional completed project. Off-plan developments have become a popular way for investors to achieve lucrative investments in the city of Manchester.
When a property is fully complete, this enables investors to justify higher rents when accepting future tenants. This is down to its new-build status and the fact that it will have undoubtedly appreciated in value during construction. Off-plan developments often come with brand new fixtures and fittings and modern furnishings. This can allow for increased rental rates and attract a larger amount of people to the elevated standard of living.
Manchester’s government has secured a drive to boost the number of new builds on the market, therefore off-plan developments are being introduced to ease the housing shortage. Off-plan properties are becoming increasingly common, particularly with the added bonus of providing more value for money than most traditional housing.
One notable advantage of off-plan Manchester property is the ability to secure a purchase significantly below market value. This is often due to developers who are keen to demonstrate a set amount of sales prior to marketing the development. Some developers grant additional discounts for those purchasing more than one unit together as an added incentive. RW Invest has built up a professional relationship with all of the developers they work closely alongside. As property investment specialists, we perform thorough due diligence to the highest standard on properties and the areas to ensure a perfect environment for successful property investment. Not to mention, to help secure the best discounts for our clients due to our ability to sell our below market value properties quickly and efficiently.
Comparing off-plan developments to similar properties within the area is one of the most accurate ways to predict the final property price. It can also act as a gauge for the direction of prices as well as providing an indication of the possible return you could expect when you come to let or sell.
As with any property investment, it is important you perform careful due diligence surrounding the development and the area. If you fail to carry out suitable research in real estate, you could leave yourself in a financially vulnerable position. It is easy to underestimate or misjudge the potential demand for a rental property before you buy. One of the most critical factors in determining an estimate for capital growth is location. What is in the pipeline for the wider region? Are there any progressions in local infrastructure? What amenities does the area have that will be a major pull for a prospective tenant?
Property investors are often attracted to Manchester off-plan due to competitive rental yields. With an average rental price growth of 5.76% compared to London’s measly -1.12% and substantial capital gains. If capital gain is the main driver, then investing in off-plan can be a great vehicle for many. This is because it can be a sure-fire way of maximising the potential of your investment portfolio and returns for property investors can be seen quickly once the building is completed.
Although capital appreciation can be difficult to forecast, supply and demand can impact the value of any property investment. Manchester is one of the UK’s most dominant economic forces which is strengthened by a highly educated workforce. This helps to encourage inward investment, therefore powering subsequent growth in jobs.
The Greater Manchester area is the second most populous urban area in the whole of the UK and one-quarter of Manchester’s entire population are between the ages of 20 and 29. With a growing population of more than 2.6 million, not to mention over 99,000 students attending four universities across the city. With 33,000 graduates per year adding to the tension within the property market, this has led to a severe undersupply of adequate housing.
19,000 international students reside in Manchester during their studies. This figure alone puts immense pressure on the need to build more student accommodation. Therefore, resulting in a surge of off-plan developments. A string of projects lies in the pipeline to boost the appeal and promise a new future for the city. Due to a huge population boom, relentlessly rising student numbers and an injection of diverse culture, Manchester is undergoing a renaissance, one that off-plan developments are at the centre of.
Rob Haslam, planning director at Savills Manchester says,
“If Manchester wants to meet its growth aspirations, it needs a broader range of developments to appeal to its varied demographic.
There are 7,000 new homes in the pipeline for Manchester over the next two years, but Greater Manchester’s housing need is 11,254 per year with a little over a quarter of that concentrated in the city centre.”
Experts predict that the number of people in Manchester over the age of 65 is set to grow at double the speed of the total population over the next decade, hitting record-breaking figures of around 61,000 by 2027. Due to accumulating trends towards the older generation migrating back to the city centre, the strain is placed on off-plan Manchester. This will free up family homes located around the suburbs, as many seek urban living due to being conveniently located to a multitude of amenities. A shortfall of housing pushes up the desire for suitable off-plan developments in the form of city centre living. These new properties are catering to the needs of the city’s wide-ranging population, from students right to the elderly.
The city’s expanding population reflects Manchester’s popularity as a first-class destination to study, work, live and invest. Therefore, a lack of housing is causing a spike in off-plan developments which is pushing rents up. All great news for savvy investors seeking unmissable investment opportunities around the city.