Manchester is the great success story of recent years in the UK. The vast, post-industrial Northern Powerhouse city is experiencing a boom unlike anywhere else in the country. Once labouring under the weight of its own history as the UK’s manufacturing industries slowly disappeared from the landscape.
But Manchester has evolved and adapted, changing with the times to become an economic powerhouse once more. Its rise to prominence has seen it become the UK’s second city, playing a game of cat and mouse with London; a city suffering from a slumping house market, a mass exodus of professionals in their 30s and a cost of living that can shock those not used to the capital’s prices.
As London’s property market sags under its own weight, Manchester’s has grown rapidly. Investors and builders, both domestically and from overseas, have made great use of a city desperate to transform and present itself to the world in a new light. Much like Liverpool, their North West neighbour, Manchester has sprung up with low average house prices, high rental yields and positive capital appreciation projections that has turned the heads of property investors nationwide and internationally.
The latest property price index figures put Manchester at the top of the UK’s 20 largest cities. Capital appreciation growth for the 12 months to the end of June 2018 came to a staggering 7.4% against a national average of 4.6%. By comparison, over the same 12-month period, London’s capital appreciation grew by 0.7%; one of the smallest figures in the country. Liverpool and Birmingham rounded off the top three with 7.2% and 6.8% respectively.
During the first half of 2018, sales of residential properties in the city grew by a rate of 56%. With that, house prices across the year are set to grow by 6.5%; a figure that is head and shoulders above the national average of 3%. Further growth of 22.8% is predicted in the next four years.
Moreover, the average price of a two-bedroom flat rose by 8.7% through 2017 with rents climbing by 3.2% during the same period. Rental rates are expected to increase by 40% more than the UK average by 2022.
Manchester is considered a strong property investment market thanks to its buoyant purpose-built student accommodation (PBSA) sector. Student developments currently form the backbone of Manchester’s property economy and provide a solid platform for future growth, prosperity and profitability.
Manchester has the UK’s second biggest student market. Over the last five years the city has seen a 20% increase in the number of overseas students attending Manchester’s higher education institutes. This swell in the student body has further added to the ample demand for student accommodation that far outweighs the current supply.
Manchester already has nearly 24,000 private student bed spaces, but the need for more is ever-present. The effect of demand exceeding supply has already seen a rise in prices in the city. Over 2017, the price of en-suite student bedrooms rose by 3%, while studio apartment rents increased by 5% over the same period. For investors, who will find Manchester sporting much lower entry costs than other parts of the UK, the opportunity to take advantage of such auspicious economic factors.
High student numbers, impressive student retention and a huge population density in the city centre means the demand for high end luxury apartments and student accommodation is at an all-time high. Leading property investment firm RW Invest are one such company who find that demand for their properties is so high that developments are snapped up very quickly after being made available.
Consequently, Manchester is now deemed the most liveable city in the UK, and is ranked 35th in the world. Property investors would do well to heed this notion. Right now, and for the foreseeable future, Manchester is the best bet for UK property investment.