Buying property in Manchester

Buying Manchester real estate: a UK property portfolio mainstay for much of the past decade

Since the global economic downturn in 2007/8, and right through the pandemic, overseas investors have experienced stable returns as a result of buying property in Manchester, England, with both monthly rental yields and long-term capital appreciation outperforming much of the UK national market.

Manchester real estate investment performance

For a consistent period of 5 years, Manchester property has recorded the best rental yields of any major city in the UK. Yields currently average around 5.37% in Manchester – although investors who make informed choices can achieve much higher.

For contrast, although London property remains a staple choice for international investors, average rental yields in London are less notable by comparison, at 2.93%.

The other major benefit Manchester affords individual investors, both domestic and overseas, is literally it’s affordability. Initial cash outlays are much lower than in the capital. In fact, the latest full-year figures show Manchester as the number one city for private property investment in the UK.

Manchester’s property boom is just beginning

It was at the height of the pandemic in 2020 when experts forecast Manchester would undergo both the largest capital growth (17.1%) and rental growth (16.5%) of any UK city in the next 5 years.

The first quarter of 2021 recorded stunning tenant demand for city centre flats in Manchester. On average, investors saw a 34% Y-o-Y rise in the number of inquiries for their property – all while rental rates rose 24% over the last 5 years.

Population growth in Manchester has far outstripped supply of city centre property. It is only a few years since it was discovered that the city centre population was growing at a rate almost 15 times faster than homes were being built.

The investment fundamentals underpinning Manchester’s real estate performance

Manchester is a unique location for supply and demand within the UK.

Consistently named as one of the best places to live in the country, Manchester offers people a premium aspirational lifestyle, without the expenses associated with London living.

Furthermore, as home to two of the UK’s five largest universities, Manchester welcomes 100,000 students from all over the world every year. This student population drives thousands and thousands of new people into the city annually and, although the vast majority of these people live within the dedicated student rental sector, many stay beyond their university years and gain employment within the city centre.

Consequently, Manchester has the most rapidly expanding young private rented sector in the UK. It has 60% more 25 to 29-year-olds than the UK average.

It is no coincidence that the vast majority of the FTSE 100 companies are headquartered or have a presence in Manchester, while international powerhouses such as the BBC and Amazon have both made infrastructural investments to base themselves close to the city’s huge – and growing – talent pool. Furthermore, the confidence in the talented labour market is long-term and even since the onset of the coronavirus pandemic, 2.6 million sqft of office space plans have been submitted by developers.

Master plan and institutional backing for Manchester property investment

Successive UK governments have seen the potential in Manchester, helping aid and guide its growth; whether as a pillar in the Northern Powerhouse plans, as part of huge domestic projects such as HS2, or simply supporting investment from the Middle East and China.

Buoyed by this, the city centre has been transformed over the past decade with billions of pounds poured into its development:

First Street – £750 million investment

• 20 acres of city centre land
• Visited by over a million people per year

Salford Central – £1 billion investment

• Regeneration of commuter hub and surrounding area by The English Cities Fund – a joint venture between Muse Developments, Legal & General and Homes England

Sportcity – £150 million initially investment

• Continual investment created a sports hub that attracts over 4.5 million visits annually
• Plans in place for a £350 million arena

Spinningfields – £1.5 billion investment

• 16,000 resident office workers
• 5 million annual visitors
• 430,000 sqm of commercial, residential and retail space

NOMA – £800 million investment

• A 20-acre regeneration of Manchester urban land owned by The Co-operative Group and Hermes Real Estate

MediaCityUK – £700 million investment

• Home of the BBC
• A 75% stake was bought by Landsec in Nov 2021, for £425.6 million
• The 37-acre media and technology hub has planning consent for new workspace and homes which, when built, could be worth an estimated £750 million

Airport City – £1 billion investment

• Created thousands of new jobs
• Government-designated enterprise zone around Manchester Airport
• 5 million sqft

The billions spent by governments, sovereign wealth and institutions help smaller-scale individual private investors feel confident that city centre Manchester is the place they should look for investment flats and apartments for sale.

The city has already showcased a strong recent record of high returns – and is only just embarking on its growth curve.

Where in Manchester is good for property investment?

If you’re seeking to buy flats or apartments in Manchester city centre, you can expect a solid floor for both capital appreciation and rental growth over the short, medium and long-term.

The M1 postcode and those that surround it offer yields consistent of more than 5%, while property prices could rise by as much as 22.8% in the next year.

Manchester real estate for sale

Chestertons Global New Homes is an expert within the Manchester real estate market, having matched investment properties with portfolio needs for investors all over the world.

We can help you source both prime city centre developments such as the prestigious X1 and Deansgate Square developments, as well as the pick of high-performing suburbs such as Altrincham.