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Manchester is rivalling London buy-to-let investment

2016 11 27 Manchester is rivalling London buy to let investment

Buy to Let Investment Property in Manchester, UK, is seeing an ongoing surge from both overseas and domestic buyers and is rivaling London as an investment hotspot.

That’s the view of leading investment specialist, Manchester-based Sequre Property Investment.

Manchester is currently the strongest UK property market outside London, with the highest rental yields in the UK at up to 6.02%, according to a new report from property investment firm IP Global.

It is receiving increasing interest from international investors, with top Chinese property website suggesting, “We expect London’s share of total investment to decline gradually as Manchester and other cities become more successful at attracting Chinese buyers.”

Since the IRA blast in 1996, which devastated the whole city, Manchester’s economy has almost doubled in size, while its population is up 26% and employment is forecast to increase by a further 4.3% over the next five years.

This significant growth will continue to fuel the lively residential market where demand from the 2.5million-strong population already significantly outweighs supply, says Sequre.

Manchester is also becoming a tourism hotspot for travelers from the Middle East. The city has seen a 33% rise in visitor levels between 2011 and 2015, with travelers from the United Arab Emirates alone worth over £18million to Manchester’s economy, underlining its growing profile as an inviting destination for wealthy holidaymakers, according to research by Select Property Group.

The Northern Powerhouse vision has already created more than 8,000 new jobs over the past four years with the commitment for another 850,000, by 2050. Following Prime Minister Theresa May’s August confirmation that she will press ahead with former Chancellor, George Osborne’s, plans to boost infrastructure and assign power to the city, Manchester is seen as a safe haven for property investment and presents an increasingly attractive proposition to both overseas and domestic buyers.

Graham Davidson, managing director at Sequre Property Investment, tells OPP.Today, “Since the Brexit result was announced, the drop in value of the sterling has caused a surge in investor interest in the UK, particularly among Chinese buyers. Interest in London has dwindled due to poor returns and reports of prices falling whilst outside of the capital, Manchester has been crowned the best-performing city.

“Manchester is one of the best locations for buy-to-let in the UK, continually topping reports from major banks, finance agencies and other official outlets as a stand-out location for high rental yields and affordability – both key factors when choosing a location for investment. A heavy student population from four universities and a strong presence of young professionals keeps rental demand high all year round.

“Chinese buyers are especially keen on properties in northern cities due to their high rental yields, but also because China’s Government is helping to build the Northern Powerhouse ambition.”

Rising Manchester property values are helping to strengthen interest in the coming year, he says. “Due to the progression of the Northern Powerhouse plans, employment in the city is forecast to increase by a further 4.3 per cent over the next five years, which will continue to boost the population and fuel the lively residential market, of which demand already significantly outweighs supply.

“Whilst overseas investment in the residential property market is also particularly strong, the outlook for 2017 is looking very promising indeed. We certainly expect rental yields in the city to continue to reach an excess of 6 per cent.”

The Yorkshire city of Leeds is another northern town that is likely to see strong rental yields in 2017, says Mr Davidson. “Whilst demand will remain strong in Manchester I expect Leeds will also come into the spotlight as the government implements Phase Two of High Speed Two (Hs2). HS2 is one of largest regeneration projects in Europe and we know that historically infrastructure paves the way for wider investment. What’s more, the city has the fourth largest student population in the country and is served by four universities, meaning the demand for rental properties is extremely high. Landlords can expect to see a 6% yield on properties in Leeds city centre.”

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