Northern Powerhouse to generate profits in property, Manchester

Property investment returns are booming in Manchester

The Northern Powerhouse project is gathering momentum. There’s a tremendous transformation occurring across the north. Investment is flooding in, with transport, health facilities, technology and business all benefitting. Of all the northern cities that will experience the massive positive effects, Manchester is probably the biggest beneficiary.

In this article, you’ll learn why investors in property in Manchester are likely to be among the biggest winners from the Northern Powerhouse effect.

What is the Northern Powerhouse?

In 2014, George Osborne (then the UK Chancellor of the Exchequer) announced ambitious plans to rebalance the UK economy and reduce the reliance on London. Osborne’s vision was a “Northern Powerhouse; a collection of northern cities sufficiently close to each other, that combined they can take on the world”.

The idea is to devolve economic powers to city councils and invest heavily in transport and infrastructure to support business investment, a growing population, and encourage regeneration. The vision is to create an economy to rival that of London and the south. The attainment of this vision is now in full swing. The short-term government-led investment includes £150 billion into healthcare, £45 billion into education, and £13 billion on transport.

Manchester is the engine room of the Northern Powerhouse

Manchester, as the first city authority to have economic powers devolved to it, is seeing a surge in significant investment from global funds and businesses. Manchester is rightly described as the ‘engine room’ of the Northern Powerhouse. Deals so far include:

• Amazon opens a new fulfilment centre at Manchester Airport, creating 1,500 jobs.
• Manchester Airport gets a £1 billion facelift, enabling it to increase passenger numbers by 10 million over the next 10 years.
• Manchester’s tech hub linked to Silicon Valley by direct flights between Manchester and San Francisco.
• Chinese investment into Manchester is rocketing, with several multi-million-pound investments into Manchester property already underway (and further encouraged by direct flights between Manchester and Beijing).
• American investors pile into the Northwest of England, with 50% of inward investment from America in the last four years.

Population growth will push demand for property in Manchester

This massive public and private investment are translating into more jobs and a rapidly-increasing local population. The number of residents here is expected to increase from 2.8 million to over 3 million by 2035. The number of jobs is forecast to grow by almost 4% over the next five years alone. To keep up with the demand for homes, developers will have to build more than 10,000 new build homes every year through to 2035.

Headline news translating to heady property investment opportunity

Since George Osborne first announced the Northern Powerhouse project, it’s been hitting the headlines across the globe. Investment into Manchester has been flooding in. And since new Prime Minister Theresa May announced the government would forge ahead with its ambitious plans for the north, property investors have joined the stampede to invest. Chinese investment in regeneration projects and residential property has doubled.

Investors have been reaping the rewards of their foresight and investing where the money is. A report from LendInvest says that Manchester provides the most profitable rent returns for buy-to-let investors. It’s easy to see why LendInvest comes to such a conclusion. We’ve found that:

• The rental yield in Manchester is over 6%
• Manchester property prices increased by around 11% between June 2016 and June 2017
• At an average of approximately £182,000, Manchester’s residential property is around 17% below the national average

But, though its position as the beating heart of the Northern Powerhouse has been the catalyst for property investors, without the existence of strong property fundamentals, profits would be unsustainable.

Northern Powerhouse effect supported by the strongest property fundamentals

Incredible property fundamentals back Manchester's tremendous potential for property investors. Long-term investment should be rewarded handsomely, as:

• 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.

Manchester is the engine room of the Northern Powerhouse. It has fantastic fundamentals covering shops, schools, transport links, major employers and major investment. No wonder then, that the city is fast becoming the foundation on which profitable property portfolios are built and not simply a location for diversification.

We think that Manchester is one of the best places to invest in property UK. To discover more about the amazing new build property investment opportunities in Manchester, contact one of the Gladfish team today on  +44 (0)207 923 6100.

Live with passion,

Brett Alegre-Wood