Buy-to-let properties have become a major way for investors all over the UK to hedge their wealth against inflation while profiting in the short and long term. And while some investors stick to their own towns and cities, others look far and wide for the best hotspots that offer the best returns.
One of these is the city of Manchester, which is largely deemed as the London of the North. Over the last couple of years in particular, both private and institutional investors have flocked to the city with the goal of profiting from the growth Manchester has been seeing over the last decade.
If you’re looking to purchase a buy-to-let property in Manchester, it’s crucial that you invest in the right area. And to help you make the right decision that will yield you the best return on investment, keep on reading.
Why Invest in Manchester?
The primary reason you would want to invest in a buy-to-let property in Manchester is because the city is growing at a rapid rate and shows no signs of slowing down. Not only that, but the city is filled with young people, who make very decent money and can afford to pay high rent for properties in areas of interest.
The average rental yield in Manchester is currently at 9.77%, which is a rate you will struggle to come by in other major cities across the UK. This rental yield is largely due to the lower property prices, massive demand for rental properties, and relatively high rental prices.
And if you needed another reason to invest in a buy-to-let property in Manchester, just take a look at this. Experts predict that the Manchester economy is expected to see an annual average growth of 2.5% between 2024 and 2026, which is 0.4% higher than the national average.
Property Value Across Manchester
Property prices in Manchester have enjoyed a steady increase over the last several years. Between 2020 and 2023, property prices in the city have gone up on an average of around 25%, which is great news for investors who owned properties before the hike in prices.
To give you a good idea of how much you’ll need to invest on a buy-to-let property right now, we’ll look at a number of neighbourhoods across the city and how much the average property currently goes for.
The heart of Manchester – its city centre is the primary location for buy-to-let investors. This comes as no surprise considering the large majority of highly paid tenants work in the area. The most common type of property here is apartment buildings, which go for an average of £251,299.
Salford Quays is an area of Salford, Greater Manchester, which is also near the end of the Manchester Ship Canal. Salford Quays is also home to Media City, which is one of the most popular residential areas in the whole of Manchester.
The most common type of property here is newly built apartment buildings. As of right now, the average apartment in Salford Quays will set you back around £200,000, which is very reasonable considering the fact that the area is rapidly growing year on year.
The Northern Quarter is a trendy and vibrant neighbourhood located in the heart of Manchester. Known for its independent shops, restaurants, and cafes, this part of town has become a hot spot for many young people looking to settle into the hustle and bustle of city life.
The main type of property in the Northern Quarter is apartment buildings and complexes (as you could expect in such a prominent part of town). If you’re looking to invest in a property here, you should set aside around £220,000, which is what the average property in the area sold for over the last year.
Ancoast is one of Manchester’s up-and-coming neighbourhoods. Situated just east of the Manchyester city centre, this part of town was largely known for being the industrial area, which has gone through significant development over the last few years.
The type of properties you’ll find here are a blend of converted warehouses into newly-built apartment buildings. If you’d like to purchase a buy-to-let property here, expect to pay around £266,982, which is still £40,000 less than the average property price in Manchester.
Didsbury is one of Manchester’s greenest neighbourhoods. Located just 4 miles South of the city centre, it’s a prime spot for families looking to live in peace but not too far away from the heart of the city.
Here, you’ll find a combination of apartment buildings and semi and fully-detached homes. As you can expect, property prices here are quite a bit steeper, and for a good reason. If you buy a property here and rent it out, you’ll only attract wealthy individuals. That said, you’ll need an average of £363,789 to make that a reality.
Rusholme, located southeast of Manchester city centre, is a dynamic and multicultural neighbourhood renowned for its vibrant atmosphere. One of its notable features is the renowned “Curry Mile” on Wilmslow Road, where you can find a plethora of restaurants and shops offering delicious cuisines from India, Pakistan, and the Middle East.
Here, you’ll find a variety of properties, ranging from flats to semi-detached homes. In this part of the city, the average home was sold for £200,387, which is a great entry price for new investors with limited funds.
Rental Demand in Manchester
The demand for rental properties in Manchester has been rising year on year. In fact, the demand is so high that property developers are struggling to meet the demand, hence the higher rental prices. What’s more is that the rental demand isn’t expected to slow down as tens of thousands of young people flock to Manchester after graduation to start working and living in the city.
To give you a bit of perspective in terms of numbers, the average rent growth rate in Greater Manchester between the years ending September 2021 and September 2022 was 9.5%.
Manchester is the perfect place for buy-to-let investors. There are many parts of town that offer fantastic ROI and yield that’s in times higher than the national average. And remember, buying a property in Manchester isn’t the end of the world. If you ever decide to call it a day (even with a tenant inside), you can sell your tenanted property to cash house buyers like We Buy Any Home and move on.