Manchester is one of the fastest-growing cities not just in the UK but in the whole of Europe. As a result of that, many opportunities are starting to open up, attracting tens of thousands of new residents to the city each year.
As a result of the influx of new people, property prices in Manchester have seen a steady rise over the last several years, leaving many investors wondering if Manchester has peaked or whether it’s still a good place to invest in a property.
To help you come to a conclusion, in this article, we’ll go over what the Manchester rental market currently looks like, what rental yield you can expect, among other relevant information you should be aware about.
What Does Manchester’s Rental Market Look Like?
As a result of the massive influx of people who are making Manchester their home, the demand for rental properties across the city has sky-rocketed over the last several years. This has resulted in many build-to-let projects taking place all over Manchester.
Due to the rise in demand and lack of supply, rental prices in Manchester have been one of the fastest growing across the UK. As things look like right now, investors who own rental properties across the city are cashing in tens of thousands of pounds per year, per property.
To give you a better idea of the rental market in Manchester, the average rental price in Manchester is £1,053. Prices in that range and higher can be mostly seen in areas such as Didsbury (M20), Ardwich (M12), and Levenshulme (M19).
What Rental Yield Can Investors Expect?
The rental yield you can expect for your property in Manchester will vastly depend on where your property is. Certain parts of Manchester where properties are pretty expensive while rents are relatively low have a very low yield – often in the range of 3 to 4 percent. Some of the areas in Manchester with low yield are located in postcode districts such as M1, M28, M29, and M33.
On the flip side, if you own a property in postcode districts such as M14, M11, and M7, you can expect a yield of around 7.5 to 9.4 percent. Do note that if you own a cheap property in an expensive area, your yield will be much higher than average. So if you’re looking to buy a property with a great yield, look for one that has a total value of 10-12x the price of the annual income you’d receive from renting it out.
How Can You Become a Landlord in Manchester?
The first step in becoming a landlord in Manchester is obtaining a property. Once you have bought a property, you need to make sure you have all the right insurance policies in place and that you are 100% familiar with all the landlord laws in England.
Before renting out your property in Manchester, you must apply for and obtain a landlord registration. In Manchester, you must have a license to rent out your property for certain areas in the city and if you’re renting out houses in multiple occupation (HMO).
Once all the legalities are covered, you need to draw a contractual agreement with the dos and don’ts of your property – such as terms amount pets, smoking, and other. Once that is done, you can start looking for your first tenant.
You can use marketplaces, groups, and other such places to promote your rental property and find a tenant. Alternatively, you can seek the help of an estate agent in Manchester that can help with the finding of a tenant for your property. The latter option will cost you a % of the rental price, but it will also mean that you don’t need to do anything with the property as it will be fully managed.
Should I Invest in a House or a Flat?
As Manchester is mostly populated with young people working in offices, flats (especially in the center) are mostly the go-to option. If you want to attract middle-class families with children, then investing in a house in one of the wealthier areas of Manchester is a better idea.
Generally speaking, both houses and flats bring in a similar rental yield. When deciding on the property you want to buy, you should consider how much you want to invest, where you want the property to be, and what type of tenant you’d like to attract. It’s also worth noting that since the Manchester property market is growing faster than in most places around the UK, you can’t go wrong with buying either of the two options.
If you are just getting into investing and have limited capital, a flat is probably the better choice as they are often cheaper. You can find one/two bedroom flats in prime areas in Manchester for under £150,000 – £200,000.
What Happens If You Want to Stop Investing?
If you’re tired of being a landlord and managing everything to do with your investment property, you have a few different options. The first option is to give up your property to an estate agent who can rent out and manage your property for you. This will come at a fee, but it might be just what you need if you really don’t want to deal with finding tenants and managing your property.
The other, and arguably better option if you want to stop investing and cash in on your investments is to just sell your tenanted property. To sell a tenanted property, it’s best to go through an estate agent such as WeBuyAnyHome.
As specialists in the area of selling tenanted property all over Manchester, we can help you cash in on your property without dealing with any of the stress involved, especially if you currently have tenants in the property you want to sell.
Should You Invest in Property Here?
Manchester is one of the best locations to invest in property in the whole of the UK. Prices – for the most part are still much lower compared to the UK average while rents are steadily going up year over year. This opens up the perfect window of opportunity for investors who can get into the market while property prices are low and benefit from the ever-rising prices of rent for the years to come.
If you plan on investing into a property in Manchester, make sure you do it soon as the property market prices across Manchester are some of the fastest-growing in the UK. This is especially true when it comes to prime rental areas in Manchester such as Media City and Deansgate.
