Why Manchester and Birmingham are likely to continue to outperform
Investors who have followed our recommendations have tended to experience great returns. This is because when we research to find the best places to invest in property UK, we dig deeper than most.
Our property investment research algorithms examine 108 data points across 324 UK districts. The resulting property research guides are packed with information to help you make a solid choice of investment location. (Get free access to all our property research by clicking here.)
In this article, you’ll get a taste of why we’ve been sending investors to Manchester and Birmingham for a couple of years now. You’ll also get a flavour of why we think these two cities are probably the UK’s top property hotspots today and could outperform all others in the years to come.
Manchester property prices are increasing almost twice as fast as the UK average, according to home.co.uk. In the 12 months to April 2018, residential property prices in Manchester were up by 5% (to a shade more than £191,000) compared to an average of around 2.6% across the UK (Nationwide House Price Index). With average rents of £982 per month, the rental yield of 6.1% is way above the national average, too.
These numbers alone make Manchester look attractive for property investment. Property prices are more affordable than the UK average by about 15%. Higher rental yields should support price growth in the future. But rapidly rising property values and high rental yields don’t just happen for no reason.
Here are a few highlights that lead us to believe investors will continue to do very well by buying property in Manchester:
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- Manchester is the designated heart of the Northern Powerhouse project
- HS2 is coming here, and that will speed up connections to the UK’s other major cities
- A major extension of the Metrolink tram network will make travelling locally far easier
- The population is growing rapidly, with all demographics increasing in numbers
- Major companies are moving here, and the new BBC MediaCityUK complex has confirmed Manchester as a destination for creatives in the digital age
- Housing needs in Manchester are for more than 3,000 new homes per year, but with only 7,000 new homes in the pipeline (and only 1,000 completions on average per year), the demand outweighs supply by some margin
Demand from tenants is also outstripping supply, which indicates that rental prices will continue to grow and support further increases in valuations. We’ve looked at Manchester upside down, back to front, and inside out. Every way we examine the city, we come to the same conclusion: it’s a great place to invest in property.
Like Manchester, Birmingham is highly affordable for property investors in the UK, with the average residential property price of £185,169 (home.co.uk), around 18% below the national average. The average rental price of £936 per month provides a very healthy rental yield of 6.1%, on a par with that achievable in Manchester. Like Manchester, Birmingham is benefitting from a period of economic growth that is likely to be accelerated by high-speed rail:
- The HS 2 rail link will reduce travel times into London to less than 50 minutes, making Birmingham a commuter hub
- Cheaper property and good economic dynamics are encouraging large firms to come to Birmingham
- With companies like HSBC and HMRC expanding here, the city is set to rival Leeds as the UK’s largest financial centre outside of London
- In November 2017, Birmingham was named as the UK’s most improved city by PwC and Demos, based on factors such as health, income, skills, affordability, and environment
Birmingham is also named as the second-best English city for investment, and 21st best in Europe, by the PwC/Urban Land Institute ‘2018 Emerging Trends in Real Estate Europe’ report. The best English city? Manchester, just one place ahead of Birmingham in the Europe list. It’s a list you should take notice of, too, with analysis based upon the views and opinions of more than 800 property professionals across Europe.
Look, I could wax lyrical about why you should invest in Birmingham and Manchester for days. But I don’t need to. Contact Gladfish today on +44 207 923 6100 and we’ll arrange for you to receive our latest investment reports and property investment opportunities. Discovering and investing in the UK’s property investment hotspots couldn’t be easier.
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