The role that Manchester plays in the UK rental market is getting bigger. As people leave London in droves, the city has become the place where the rental battle is fought, and won, by a multitude of investors. The Manchester property market has never been better!
The Manchester Property Market
Manchester has always been a great home for renters in search of a career and a unique lifestyle. But now, thanks to city-wide regeneration, it’s hit a new prime.
But what does this mean for 2019?
First, a wide perspective…
We recently compiled a list of Manchester’s rent statistics compared to the rest of the UK. The city has the highest yield average (5.4%) than any other in Britain. Rental prices are growing by 5.76% annually. Meanwhile, the North West as a whole – with Manchester as its headline draw – is top of the tables for yield and capital value projections.
Average Manchester property prices are £177,594. That’s more than Newcastle, Sheffield, Liverpool and Stoke-on-Trent. Houses are being sold for more and at a quicker rate than the majority of their contemporaries elsewhere in the North West.
With Brexit on the horizon and concerns about what this may have for the property market, Manchester looks set to weather the storm and come out in growth over the next four years. By 2023, Manchester house prices are expected to rise by 21.6% (or £35,000) whilst properties in London will see just a 4.5% (or £21,000) rise in this period.
The lynchpins of urban renewal
So, what’s the cause? Why is Manchester outperforming other, similar-sized locations?
Much of it is down to regeneration – the development and cultivation of historic areas. The local council are bringing them into the 21st century, whilst paying tribute to their past and what they represented. This is occurring on a huge scale. Manchester’s skyline is changing, so it’s only right that things are also shifting on the ground and making renters keener to live there. Investors are filling that demand.
A selection of key areas may include…
Great Ducie Street
We might look to Great Ducie Street, for instance, when examining the current and future potential of the city. For decades, the Green Quarter has magnetised residents and visitors, but the old mills, warehouses and waterway could only do so much on their own. The place was crying out for fresh energy. Appropriately, Manchester City Council have granted it in the form of a 20-year regenerative pledge.
Old buildings will be converted into 1.7 million extra square feet of offices for lease. Green areas have been planned. Quality is assured, with a hard line taken on any developer who doesn’t provide a great, contemporary space for vendors and businesses. Sites such as Enigma are going to benefit enormously; 6% annual returns are in the works for any investor.
Manchester’s largest city-centre spread of grass and trees is getting a facelift. 756 apartments and penthouses will be erected as we move into the 2020s, and lounges, terraces and private gyms will skirt the natural elements. At a total value of £1bn, it’s a welcome transformation: Angel Meadow has been neglected for as long as many of us can remember.
Moving east, we should note Ancoats’ incredible popularity – something that has been brewing since the middle of the decade. Finally, it is now in full swing. A stroll around the canals will bring you to endless bars, studios and restaurants. In 2017, it was voted ‘the hippest neighbourhood in the UK’ – something that wouldn’t have been possible without development impetus.
Piccadilly Station and Campus
It’s no secret that Manchester’s best-known central location is due a revamp. Piccadilly is in the council’s sights. The HS2 and Northern Powerhouse rail expansion is largely why, as the city seeks to make a great first impression on first-time visitors or those commuting from the capital. A plaza, boulevard and entrance hall are all set to be built, which will boost the profitability of the surrounding area.
Meanwhile, a canal-side development is moving forward on the border of the Gay Village. There are plans for a ‘secret garden’ and interlinking walkways. Both of these schemes will have a notable effect on current sites like Oxygen Tower on Store Street. Oxygen is only 10 or 15 minutes away from the Campus and station overhauls and will surely benefit from the increased choice, commerce and leisure pursuits that these improvements promise.
The top-performing postcodes
Regeneration projects – and the amount of money poured into them – aren’t the only indicator of Manchester’s rental power. When we observe national postcodes, the stats have their own story to tell. Whilst the city has the strongest overall yield, price forecasts and capital gains growth, two of the region’s postcodes (M13 and M14) are in the leagues for the best rental spots in the country.
The facts are sourced from TotallyMoney’s 2018/19 Buy-to-Let survey. M13 has a mean rental yield of 6.89%, whereas M14 stands at 7.07%. Both of these are prime student neighbourhoods, close to the university and on the cusp of Oxford Road’s nightlife. Fallowfield, Rusholme, Moss Side and Victoria Park are reliable environments for big yields.
Equally, we can view more central postcodes as very kind to a rental portfolio. If we look towards the Castlefield area, Exclesior is currently offering residents an estimated 6% rental yields, with Axis following suit. Both of these developments are prime city centre living opportunities upon completion, giving residents excellent city centre access and landlords impressive rental yields.
With the points we’ve raised here, Manchester should be firmly in your mind for continued or inaugural investment over 2019. All that remains is the question of who can lead you to a fantastic site… And that’s where we come in. Alliance Investments have completed and off-plan accommodation up for the taking. Learn about our developments, or speak to us personally for a conversation on what you’re hoping to earn. 2019 is going to be an amazing year for local property. Let’s put you at the fore of what’s to come.