If you’re looking for a buy-to-let investment opportunity, Manchester has become one of the UK’s most attractive destinations. If you’re looking to find out why that is, read on to explore the city’s booming economy, diverse tenant markets, and strong rental yields are creating excellent conditions for property investors.
Manchester is one of the country’s fastest growing cities both in terms of its population and its economy. Both global and domestic investment has poured into the city as part of the city’s regeneration and upgrade of its transport system.
Rental yields are also consistently above the UK average in many parts of Manchester with a strong tenant demand which naturally reduces the risk of vacancies for investors. And even when considering all of the above, there is a good deal of room for growth as the property values in Manchester remain lower than those of London and the South East with a diverse rental market that draws a number of different tenant groups.
Let’s look more closely at those different tenant markets in turn. First is the huge student rental market drawn from multiple educational institutions such as the University of Manchester, Manchester Metropolitan, and the University of Salford. In total there are over 100,000 students with particular hotspots in Fallowfield, Rusholme, and the Oxford Road area. High yields are possible through HMOs or shared housing though with their higher turnover and shorter tenancy lengths, there is an increase in management needs.
The economic growth of the city and the influx of new businesses and the expansion of existing ones, has led to a growing demand from young professional tenants working in tech, media, and finance sectors. They have a preference for modern well-located apartments in popular locations such as the Northern Quarter, Ancoats, Deansgate, and Salford Quays. Young professionals are generally reliable and tend to look for medium-term contracts.
A final tenant group is family rentals. Families tend to favour suburbs such as Didsbury, Chorlton, and Sale and prioritise convenient access to good schools, green spaces and attractive communities. Family tenants offer lower yields when compared to more centrally located lettings, but longer, more stable tenancies.
So how does one go about financing a buy-to-let property in Manchester?
A buy-to-let mortgage requires a larger deposit of 25-40% and the rental income generated by the property must then cover 125-145% of the repayments to qualify. There is also a 3% stamp duty surcharge and as an investor you must consider the ongoing costs of insurance, management fees, and maintenance.
Manchester consistently ranks among the top areas in the UK for buy-to-let property investments. Not only does it attract as discussed a huge number of students, there is a significant level of graduate retention now which has led to a long term demand from young professionals. The expanding infrastructure means that new lucrative regeneration is happening in more and more areas of the cities, opening up further investment opportunities with excellent growth potential.
Finally, It cannot be underestimated as to how attractive the city’s globally renowned culture of music, entertainment and sports is to both existing and future residents which looks only to be growing in size and reputation. Manchester is a city that is on an upward trajectory, and with that comes opportunity.
So how can you as a potential investor capitalise on this?
First, we suggest you define your goals. Are you looking for high yield or long-term stability?
Next, you should research the neighbourhoods that align with your preferred strategy.
You should explore off-plan or refurbished opportunities for added value.
But most importantly, you should seek expert guidance from an organisation that not only knows the city, its property and tenant markets, but also can provide you with the necessary advice you need on every step of your buy-to-let investment journey. Reach out to one of our agents today and we can identify the right opportunity for you, help you navigate the financial and legal requirements, and secure a property that delivers long-term rental returns.