Why invest in Manchester buy-to-let property?

September 18, 2024

The Manchester property market is one of the strongest in the UK and represents an extremely profitable opportunity for buy-to-let investors.

A booming economy, lack of housing and significant annual population growth are just three of the reasons why this is a great time to invest in Manchester buy-to-let property.

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Economic strength, job creation and population growth

There are more people in Manchester than ever before, working better jobs and enjoying more disposable income. That is a dream scenario for investors.

Manchester’s economic strength is the foundation on which its property market is built. The city’s regional economy is worth more than £87bn per year and is made up of tens of thousands of high-quality jobs.

GDP per capita increased by 44% over the last Census period, and more than 125,000 new jobs were created in Manchester over the same time period.

Many were contributed by Manchester’s ‘unicorn’ start-ups worth £1bn or more in the city including AO.com, the Hut Group and Boohoo. They now proudly sit alongside multinational giants like Amazon, Microsoft and HSBC and together create a vibrant business environment.

These outstanding employment opportunities are a major reason why Manchester recorded the highest population growth in the UK outside London (19%) over the last Census period.

And that’s not all – there’s much more economic and population growth to come. EY’s regional economic forecast shows that Manchester’s economy should grow 2.2% a year over the next three years. That’s comfortably more than the national average of 1.9% per year and will be matched by the second-highest rate of employment growth in the country.

That means more jobs in Manchester for people in the fastest-growing modern industries like communications and technology.

With that in mind, it’s perhaps no surprise that the City Council anticipates at least 7,000 people will move to the city each year for the rest of the decade. By 2030, it is estimated that Manchester’s total population will reach as high as 630,000.

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Why invest in Manchester? Huge housing demand, lack of housing supply

All of that leads to a huge demand for housing. The city centre alone is set to be home to at least 100,000 people by the end of the decade according to the same City Council figures. They will all need homes, meaning any premium rental accommodation in that location – or with great transport links to the city centre – will see extremely high, persistent demand.

However, there are nowhere near enough homes in Manchester to meet that growing demand. Just 2,400 homes were delivered across the city in 2023 according to the Deloitte Crane Survey 2024.

A further 11,765 are in the pipeline for the next four years, but just 867 in the most popular city centre area. As a consequence of this, the City Council estimates that the shortfall of available homes will grow by a minimum of 500 a year.

That situation is already leading to property values in Manchester going up fast. The latest data from the Office for National Statistics shows that the average house price in Manchester has gone up 3.9% in the last year compared to the North West average of 3.7%.

Rents are also growing strongly in the city centre. In 2023, the average rent in the city went up approximately 20%. In 2024 growth has not been quite that strong, but another 12.5% has been added to Manchester’s average rent compared to national growth of just 8.6% year-on-year.

Not only are monthly rents in Manchester higher than the average in most other UK towns and cities, but they are also growing faster.

In the future, that growth in both house prices and rents is forecast to continue. JLL has predicted that house prices in Manchester will rise 19.7% and rents will go up 21.6% by the end of 2027.

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The perfect time to invest in Manchester property

For investors, that makes Manchester buy-to-let property for sale a number one priority location for investments at a time when the market has been given a boost by the Bank of England’s interest rate cut and property prices in the UK have hit a two-year high.

Savvy investors will be looking ahead at the new property cycle we are entering and looking at how to expand their portfolios. The sooner you invest in Manchester property, the more benefit you can get over the next four years and beyond.

Want to learn more about how you can get ahead of the new property cycle and maximise your returns? Browse our available Manchester buy-to-let property for sale and get in touch with our property experts today.