Why you should invest in the Manchester housing market

The Manchester residential property market is vibrant, and the city is forecast to see some of the highest growth in the UK.

Property transactions are brisk, Manchester house prices are rising and experts agree that the city is a hotspot for property investment opportunities.

We examine the reasons for investing in Manchester and check out some of the up-and-coming areas.

Read on to get the full picture!

The appeal of Manchester city centre

Manchester is a place where people want to live and work, both important factors when considering investing in a housing market. People want city centre living to be close to offices and the wealth of cultural amenities in the city.

Manchester boasts great architecture, theatres, a thriving music scene and is a hub for media and creative industries, healthcare, finance, science and engineering, making it appealing to young professionals. This demographic often chooses to live in fashionable Ancoats and the Northern Quarter, often drawn to apartments in converted former mill buildings. The property market offer includes good quality apartments,  co-living accommodation, and traditional terraced streets.

Manchester’s house price growth remains strong, helped in part by being a Northern Powerhouse city which has brought investment and regeneration to many areas. The city’s property market also benefits from good transport links and an international airport. It’s the UK’s second most populated urban area – the population of Manchester is 2,770,000, increasing by 0.73% from 2021 – and numbers are rising.

Greater Manchester’s suburbs

There’s a wide range of family houses in the suburbs, which are sought-after places to live for people wanting good schools, spacious houses, local amenities and safe communities, while being commuter friendly. From desirable Didsbury to other areas which are more affordable like Oldham, demand is staying high and house prices are rising.

Manchester’s rental market

The city’s rental property market is thriving as landlords looking to buy flats can see attractive profit margins – hotspots are achieving over 8% yields and investment is continuing strongly. The wide range of Manchester investment properties includes high-quality city centre developments for renters wanting to be close to offices, and traditional housing catering for young people and families.

Manchester is home to 100,000 students, the biggest student population of any city outside London which generates interest in student property investment. After graduating, the city’s opportunities mean that many graduates tend to stay, making Manchester the UK’s second most popular city for graduates.

Manchester property investment

The city offers affordable and growing opportunities, as the housing market continues to be robust with rising property prices.

According to population growth projections by Manchester City Council, population numbers are increasing and 5,000 people a year are expected to move into the centre. Inevitably, this will push house prices higher due to limited stock.

 In June 2022, the average price for a property in Manchester was £250,638, whereas the average price in London was £529,829 according to the latest data from HM Land Registry: this significant difference in house prices offers obvious opportunities for investors.

The high rates of house price growth and excellent rental yields make Manchester a stand-out location for buy-to-let investment. Off-plan luxury apartments in the city centre are proving attractive to investors, according to Manchester-based property development company Alliance Investments, as off-plan prices are often below market prices. The company notes that house prices have risen by 30% in the last five years – industry experts expect house prices to increase by 24% by 2024.

Manchester property growth

According to Savills’ research, the northwest is set to see the highest percentage value growth in 2022 (4.5%) and over the next five years, which is above London and the UK average.

Rightmove reports a 10% increase in sold prices in Manchester over the last year. According to their figures, the overall average price for a property in Greater Manchester over the past year was £242,386. The average price for detached houses was £413,053; semi-detached houses, £249,344 and terraced house prices average £178,656.

Manchester has an expected average price growth of 3.5% by 2030, exceeding the UK growth forecast of 3% (Northern England forecast).

The steep rise in house prices between 2021 and 2022 in areas of Greater Manchester is illustrated in these figures from Zoopla:

Investment opportunities in the city’s property market

Richard Dean, MD at Qualis Residential Developments Ltd., in Manchester said:

Rental prices in Manchester are set to grow by nearly 16.5% over the next few years, which is more than any other city in the UK. The city is extremely popular with students – the centre is home to two universities, with three universities in the surrounding areas, which all contribute to the continued and sustained growth in rental demand and house prices.

Manchester has also undergone several regeneration projects to expand and diversify the city area, making it more appealing to the younger generation. As well as a high student population, the city benefits from having a high student retention rate – it’s an attractive place for working professionals as well, attracting individuals that live both inside and outside the city.

Over 45% of the population is under 35 years of age, and based on the current trend in property buying, this is good news for investors. A recent report by the BBC found that over one third of millennials will now rent for their entire lives, meaning that this high rental demand will stay consistent.

The city has also grown to be one of the largest Build-to-Rent locations outside of London. Higher quality living and communal buildings are attracting both UK and international students, young professionals and entrepreneurs. Greater Manchester is extremely well-connected, with a wide variety of public transport available in and around the city, and travel times are expected to improve with the addition of the HS2 high-speed rail line.

Areas of the Greater Manchester property market with potential

Richard Dean added:

Some of the most up-and-coming areas in Manchester are New Islington and Ancoats, which have had four key planning applications agreed in order to make the area more environmentally friendly and supportive of a ‘low carbon agenda.’ This planning is set to improve the lifestyle of the residents, introducing affordable homes, walking and cycling infrastructure and public space.

Sold prices were up by 6% compared to last year. Fallowfield also provides a good return on investment, with average house prices being around £216, 095, offering a huge gross long-term rental yield of 8%. This area is also incredibly popular with students and is a thriving location.

House prices make Manchester a popular alternative to London 

According to property investment providers Sterling Woodrow, Manchester is one of the best locations in the UK for property investment. One reason is that many firms are relocating their headquarters there from London due to the capital’s high costs.

A second reason is that Manchester is a popular alternative to London for young professionals, which creates demand for high-quality serviced apartments. Thirdly, high student numbers create demand for good quality student accommodation, which makes it one of the best locations in the UK for student property investment.

Sterling Woodrow forecasts that property prices will rise by 17.1% over the next five years while demand for rental housing is predicted to increase by 16.5% by 2025. An average rental yield of 5.5% makes Manchester attractive to buy-to-let investors.

Popular residential areas and those on the way up

Ancoats

Situated east of the Northern Quarter, Ancoats was known for the manufacture of cotton in mills which established Manchester’s reputation as Cottonopolis. The area has undergone improvement schemes over recent years but retains Victorian streets, mills and factories which have been transformed into flats, bars and restaurants.

New blocks of flats have been built and there are pedestrianised areas, streets and squares, historic pubs and canals. Ancoats is home to an eclectic mix of food restaurants from around the world. Ancoats marina, with its moored canal boats, marks the border between Ancoats and New Islington.

Being a tram ride away from Piccadilly Station and next to the Great Ancoats Street ring road makes it convenient for car drivers. Some of Manchester’s highest house prices can be found here, with the average house price at £301,255.

New Islington

Regeneration has created one of the city’s coolest areas – the mix of property types includes Victorian housing blending with new houses, independent shops and bars. There are great transport links, and it’s one stop from Piccadilly Station. It’s a family-friendly neighbourhood benefiting from the Cotton Field Park and a marina. The average price is £265,443.

Chorlton

Leafy Chorlton, with its independent shops and cafes, is attracting attention from buyers daunted by prices in nearby desirable Didsbury. Chorlton saw the biggest rise in buyer competition according to Rightmove over the year to 2022, with the average house price there being £355,306. Didsbury came second, then Withington, Wythenshawe and Ashton-under-Lyne, Burnage, Stockport, Longsight, Timperley and Levenshulme. It’s 10 minutes from the city centre by tram and has plenty of independent shops and bars. The area is popular with young families and professionals and house prices look set to remain resilient.

Fallowfield

Three miles south of the city centre, Fallowfield is renowned as a student hub. It’s home to six university halls of residence as well as offering private accommodation for students. It has a host of lively bars and restaurants and 16-acre Platt Fields Park, one of Manchester’s biggest parks. Investors looking to buy property here can expect to find the average price at £214,679.

Hartpury

Once one of Greater Manchester’s most deprived areas, Hartpury has benefited from investment and is much improved. This inner-city suburb is the most affordable area of Manchester, with the average house price at £125,091.

Oldham

This Greater Manchester town is 6.9 miles northeast of the city centre. In the early 19^th century, it was a centre for textile manufacture and expanded rapidly in the Industrial Revolution. Today, it’s mainly a commuter town, with some interesting architecture provided by the cotton mills. It has lots of affordable housing, a strong sense of community and its easy access to Manchester makes it popular with young professionals and families. Oldham is more affordable than the Greater Manchester area overall and it has good road and rail links. Hollinwood is the most affordable location in this area, with an average price of £154,203.

Salford

The growth of MediaCityUK has resulted in investment and regeneration and now Salford offers good value housing, along with plenty of green spaces and an appealing waterfront area. It offers lots of contemporary cultural events and has convenient transport links to the city centre. Little Hutton is where the best value is to be found, with an average price of £158,549 offering investors potential house price growth.

Trafford

Trafford is Greater Manchester’s most expensive borough and includes the towns of Hale and Altrincham. Average house prices are above the national average at £383,219, and the best value can be found in Partington, where the average price is £184,520. Just 10 miles southwest of the city centre, Trafford has excellent transport links.

Denton

Denton is becoming an area to watch, with Purplebricks reporting a lot of activity there. This family-friendly town has good schools, parks, lively bars and restaurants and good transport links to the M60 and M67. Historically, it was a centre for hat making and is home to many longstanding residents and families. The average house price is £196,469 (increasing by 10% over last year). The housing stock includes many semi-detached properties and a mix of period and new homes.

Stockport

Seven miles from the city centre, Stockport is popular with families and commuters having good transport links. With average property prices at £282,251 over the last year, the best value can be found in Reddish with prices around £198,433.

Moss Side

This area is close to the universities and has benefited from a regeneration and investment programme. Property types include Victorian terraces and recent new builds, and with an average house price of £177,113, house price growth could be anticipated here.

Sale

Just 5.2 miles southwest of Manchester, this Greater Manchester area is popular with families and has a great community feel. The average price is £349,984.

Property market opportunities

Whether due to its lower property prices making it a viable alternative to London, the high proportion of young professionals living there, or student numbers, Greater Manchester is clearly in the sights of property investors. The city’s high growth forecasts, strong rental yields and resilient house prices are certainly presenting opportunities.