Manchester property prices are outperforming and could continue to do so
Now that the rate of growth in property prices has slowed in London, investors are searching regional cities for the best places to invest in property UK. This article explains why Manchester property for sale could offer the best returns over the medium to long-term.
Manchester property for sale is among the most affordable in the UK
While property investors have been making a killing in London since the end of the Global Financial Crisis, most regional cities have been left behind. Manchester is one of these. In fact, it wasn’t until mid-2016 that the average property price in Manchester finally recovered its previous peak from around nine years earlier.
Since June 2007, the average property price in Manchester has increased by just 14.1%. London prices have increased by an average of 78.6% during the same period. At an average price of £182,264, Manchester property prices are around 22% below the UK’s average price of £223,257 (HM Land Registry House Price Index). It makes property in Manchester some of the most affordable in the UK.
Manchester property has been among the best performers in the country over the last year. Between June 2016 and June 2017, the average property price in Manchester rose from £163,551 to £182,264 – an increase of 11.44%. Across the whole of the UK, the average increase was just 4.9%.
Property investors are finally waking up to the incredible potential of investing in Manchester’s residential property. There’s certainly a lot of headroom compared to affordability elsewhere. However, it isn’t simply the differential in property prices between Manchester and London that makes property in Manchester so attractive.
Where else can you find such an incredible rental yield?
The rental yield on Manchester property is another factor supporting property prices and investment in Manchester. At an average of more than 6%, you should receive a better income return on your investment here than elsewhere in the UK. In London, for example, rent rises haven’t been able to sustain rental yields. The average yield in London is now around 4%.
To put this income differential into perspective, for the average rental yield in Manchester to fall to the level of the average rental yield in London, based on the average rent of £934 in Manchester, the average property price in Manchester would have to increase to £280,200.
Either way, you cut it, Manchester property for sale offers investors a low entry level with exceptional rental yields.
The property fundamentals point to incredible potential for capital growth
Rental yield alone isn’t a reason to invest in property. If you base your investment strategy on this single criterion, you will probably find yourself with an underperforming portfolio – where void periods are lengthy, quality of tenants is low, and property values are falling. It isn’t the case in Manchester. In fact, the presence and strength of all the property fundamentals that are the foundation of profitable property investment are extremely exciting for the potential for capital growth:
- Manchester is a mecca for retail therapy. It has some of the best and most famous shopping centres in the UK, and a plethora of boutiques and independent stores.
- Manchester’s entertainment scene is unrivalled outside of London. Manchester Arena is Europe’s largest indoor concert venue. The city boasts more than a dozen cinemas and tens of museums and art galleries. It is also within easy reach of some of the UK’s most outstanding areas of natural beauty, including the Lake District, Peak District, and Yorkshire Dales. Sports facilities are limitless.
- For families, Manchester’s educational options are comprehensive. Children from the age of two through to 18 and older are completely catered for, with some of the best educational facilities in the country and a university network that has produced 25 Nobel Prize winners.
- Manchester boasts the UK’s second largest economic region in the UK after London and produces 3.5% of the entire nation’s GVA. It’s a powerhouse of job creation, with a diverse and rapidly expanding economy which makes it well protected against the economic downturn.
- The city is one of the best connected in Europe, with extensive road, rail, and bus networks as well as an extensive canal network. Manchester Airport, which was ranked the UK’s best airport at the 2015 Globe Travel Awards, is just minutes from the city centre.
- Manchester is benefitting from its status as being the first UK city to take advantage of the devolution of power and financing from the central government. The Greater Manchester City Deal makes billions available for investment here, supporting urban regeneration and the creation of enterprise zones and thousands of jobs.
And it gets better still. As the engine room of the Northern Powerhouse, inward investment into Manchester’s infrastructure, regeneration, and business growth is set to create tens of thousands of new jobs in thhttps://www.gladfish.com/northern-powerhouse-to-generate-profits-in-property-manchester/e coming years. It is sucking in new residents, and the population is forecast to grow strongly – so strongly, that it has been estimated that Manchester will need to provide over 10,000 new homes every year through to 2035 to keep pace with demand.
A booming economy, fantastic rental yields, population growth, job creation, and demand for housing outstripping supply – all compelling reasons for the recent price outperformance of Manchester property for sale to continue.
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