London and Manchester are two of the most popular cities in the UK. Both cities are famous for their vibrant culture, global football clubs, buzzing nightlife and distinctive arts and music scene fueled by a world-famous cultural heritage. Thus, it’s no surprise that London and Manchester have always been investment hotspots, especially for overseas investors looking for attractive returns. However, in recent times, one city of the two has emerged as the undisputed frontrunner in the race to becoming the world’s next global investment destination.
A closer look at UK’s property scene reveals that the past year has adversely affected the growth in several major cities across the country, with London experiencing its lowest growth in recent history. Since 2015, growth in London slowed down to 2.6%, the worst rate for over five years. Alternatively, Manchester experienced an exceptional growth rising by 6.8%, leading to substantial interest from investors looking at long term returns.
London’s population currently stands 8.788 million with population growth expected to remain stagnant in the coming years. Landlords catering to the renting population can expect an average rental yield of 3.6%. On the other hand, Manchester’s 2.55 million population is expected to be on a steady rise, with buy-to-let investors taking home a rental yield of 7.89% per annum. In fact, according to HSBC, Manchester is the UK’s number one location for rental returns.
One of Manchester’s greatest strengths is its student population which stands at 105,000 students studying across 4 major universities in the city. The city has the highest proportion of 20-34 year-olds in the UK which is traditionally the main target age group for the private rental market. With demand from tenants outweighing supply, various experts forecast that rents in the city are likely to rise further this year, while house prices will continue to remain affordable, suggesting that there may be a gap in the market which can be capitalized upon.
The future of Manchester seems bustling too with a predicted 15% faster growth by 2021 in property prices as compared to the rest of the UK. This comes at the back of a documented increase of 30.8% between 2014 and 2016. To add to the enticing property value increase predictions, investors can also expect to see a rental growth of 20.5% over the next four years.
Statistics show that, while London may have been an investor heaven in the past, Manchester seems to be the city that currently holds the key when it comes to attractive returns derived from an unparalleled property boom.
Matthew Jay, Managing Partner at Alliance Investments, had interesting observations to make about property investment opportunities in the two cities “I am not surprised that the London market is experiencing a slowdown. The reduction in price levels can be attributed to the draconian property related tax that was implemented in the last few years. I believe that this is restricting buyers and sellers from making a move unless it is completely necessary”
“On the other hand Manchester is experiencing an unprecedented property boom, creating a lack of supply thanks to the extraordinary demand, especially from overseas investors. Exciting times lie ahead and we are in a prime position to capitalize on it.” He added.
Alliance investments offers a host of prime properties in leading parts of Manchester that fit every need and budget. To explore their portfolio of developments and upcoming projects, log on to www.alliance-investments.com