Why Manchester has become a buy-to-let hotspot
One of the fastest-growing city economies in the UK, Manchester has emerged as a buy-to-let hotspot in recent years, reported as far back as 2014 as the country’s go-to city for property investment and development by HSBC.
Demand for city living is on the rise and Manchester’s development boom coincided perfectly with this peaking interest, although other huge factors including new businesses, infrastructure development and even simple good press as the city emerges as an international must-visit location have all helped increase tenant footfall.
A driver of demand for the buy-to-let market is millennials as Manchester ranks as one of the youngest cities in the UK with an average age of 37.8. Younger professionals regularly move into the city from the likes of Blackpool, Nottingham and Sheffield as well as from London, as a similar standard of city living at a far more affordable level proves a big attraction. In fact, 20% of capital expats last year relocated to the North West or the Midlands.
As a result, Manchester’s population is expected to grow beyond three million before 2040 with an estimated 200,000 new homes required, a clear signal to buy-to-let and off-plan investors that Manchester is a market with huge potential.
Buy-to-Let Hotspots within Manchester
So where are the most popular buy-to-let zones within Manchester itself? Two of the most popular postcodes include M6 (Pendleton, Claremont, Langworthy and parts of Salford) and the student hotspot of M14 (Fallowfield, Rusholme and Moss Side).
Zoomed out a little, Salford as a borough is one of the fastest growing areas within this market, thanks in part to the emergence of Media City and vicinity to the city centre too whilst offering a slightly more affordable monthly rent for city-centre dwellers.
Tameside too, including Denton, Droylsden and Stalybridge, is also popular thanks to good transport links into the city centre itself.
And of course, Manchester City Centre itself is one of the buy-to-let hotspots too with strong demand and a solid tenant profile in the zone.
Read more: Demand for rental property outstrips supply
Mark Burns of property investment firm Hopwood House said that: “If it is high rental yields you are looking for, it seems areas such as Pendleton, Claremont, Langworthy and Salford top the charts at 8.84%.
“Their typical monthly rents come in at £1,034 thanks to their proximity to the centre of Manchester and the University of Salford.”
“With affordability and rental yields both doing better than those in the capital, many investors are now setting their sights in a northerly direction, particularly thanks to the number of students and young professionals moving to Manchester.”
Key properties of emerging buy-to-let zones
But what marks a borough or specific postcode out as a potential hotspot for buy-to-let development and investment?
One of the keys is great transport links to attract tenants who work within the city centre but are open to living just outside it, either for affordability reasons or as a lifestyle choice to get away from elements of the hustle and bustle.
In fact, research suggests that Manchester buyers were prepared to pay nearly 5% more for a house within half a mile of a tram stop.
And as with any university towns, the creation of student accommodation within a short commute of university campuses is another pull for investors and planners – highlighted by the likes of Fallowfield and even Moss Side proving some of the current most popular hotspots.