Manchester: Location Report December 2018

Updated: Dec 17, 2018

With the second largest economy in the UK, the city of Manchester offers investors unrivalled opportunities in a location with thriving cultural, financial, digital and technology sectors. Manchester offers a range of investment opportunities; from new-build apartments and housing estates, to student accommodation and commercial units. Manchester "is also home to the largest commercial property market outside London, the largest private equity community, and is set to become one of the world's top 20 digital cities by 2020" (Insider, Invest in Manchester). The skyline of Manchester has already changed drastically in the past few years, and is only set to change further for the better as new residential developments begin to redraw the map and attract people to the area.

"Manchester is a rich destination for investment and a shining example of what big ideas with a unified approach and the right kind of ambition can deliver" - Dan Sweeney, TLT LLP


Development around the Greater Manchester area - including large developments such as the Salford Quays complex - has bought a wealth of investment and interest to the area in the past five years. This interest has led to the ability for the council to improve the city and surrounding area, including improvements to the MetroLink system. Manchester is also one of the focal hubs for the Northern Powerhouse regeneration project, making it a desirable location for investors.


Greater Manchester is the home of some of the best businesses headquarters including The Co-Operative, JD Sports Fashion, N Brown and Kellogg Marketing and Sales (UK); drawing in hundreds of ambitious young professionals and other large businesses to the area each year. This influx of major employers and start-ups moving their headquarters and businesses to the county has seen the population growth in Manchester increase from 510,746 in 2011 to 545,500 in 2017 - a figure which is predicted to grow by a further 56,000 by 2034.


This large population growth in the city has created opportunities for build-to-rent investors specifically; with more developers than ever choosing to build large apartment blocks with modern facilities for residents such as gyms and cinema-style rooms. In the past decade alone, Manchester has attracted large scale investors such as La Salle Investment Management, M&G, DTZ Investors, Moorfield and Invesco, acting as a catalyst drawing other major investors to the area.


"The north west of England, in particular Manchester, is predicted to outperform the rest of the country for housing market profits, hence it has come to be referred to as the 'London of the North'" (Property Reporter)


It's not just the number of people living in the city that has changed, however. Manchester has also seen a shift in the demographic of people living in the city, which has also prompted a shift in the property market. A larger number of people than ever are now renting in Manchester as opposed to buying properties, something which is increasing house prices in the area by significant amounts (especially compared to a number of other former 'property hotspots' in the UK due to Brexit) and the rental demand in the area. This shift has opened up great opportunities for both developers and investors to make the most of the shift from London to the north.


The private rental sector now accounts for 30% of all property in Manchester - above the national average - bringing interest from investors to the area. With house prices rising in the city comparatively high against the rest of the UK, recent research from Zoopla have reported that 38% of investors who are considering buying a house are looking to the north-west as they believe values will rise in the next few years; and 27% believe that Manchester is one of the most motivating cities for getting competitive rental guarantees.


"Even though Manchester's house prices are rising rapidly, the city's rental yields, which currently stand at almost 8%, are still twice what can be achieved in London" (Property Reporters). Rising house prices haven't just benefitted those looking to flip houses or invest to sell, they have also meant that increasing numbers of people are renting for longer. In Manchester specifically, 27% of houses are on the rental market. There is more demand than ever for accommodation in the city, and the number of available properties is severely below this, offering uniquely good opportunities for developers and investors.


Andy Burnam MP, Mayor of Greater Manchester, said "There has never been a better time to invest in Greater Manchester. Over the past 12 months we have made great progress in making this one of the best places in the world to grow up, get on, and grow old. We have been investing in our culture and leisure offers, looking at how we can provide the right housing in the right places for everyone and investing in skills and infrastructure to make this a place where business thrives."


Student accommodation is one of the most popular forms of investment in Manchester right now, with a student population of over 40,000 at the University of Manchester alone (2016). The University of Manchester also boasts the largest clinical academic campus in Europe. In the wider Greater Manchester area, the number of leading universities increases to five; University of Manchester, Manchester Metropolitan University, University of Bolton, Royal Northern College of Music and University of Salford. These universities combined boast over 201,000 undergraduate, postgraduate and doctorate students (2017).


The university culture of Manchester is one of the most regarded in the UK, with a number of schemes in the pipeline that will only serve to benefit the city further. In September 2018, Manchester Metropolitan University announced plans for a £35 million new school for the educational facility set to open its doors in 2021 - the School of Digital Arts (SODA), which aims to bring creative and digital arts, artistic technology and computing to a new era. The school will see an additional 1,000 students joining the city's already thriving student population, and will aim to increase the future-proof skills the city needs from its graduates. The north-west also boasts an impressive residual rate of graduates, with 66% of graduates staying on for work following their university degrees - a figure that was only matched in London (2015/16).


"The ingredients for a growing city are skills, innovation and infrastructure. But one reason the city centre is so successful is it has a lifestyle that lots of young - and not so young - professionals want" - Sir Richard Leese, Manchester City Council


And it's not just Manchester city centre that's attracting people to the Greater Manchester area. Key towns are attracting growing families; offering good sized accommodation, good schools, short commuting distances, and good communities. In fact, three areas of Manchester were named amongst The Sunday Times' Best Places to Live 2018: Altrincham, Chorlton and The Heatons.


Transport is also a key factor contributing to Manchester's popularity with young professionals and commuters, with the Northern Powerhouse investment and HS2 Scheme offering quicker transport to London and major cities in the north, as well as more locally to Manchester Piccadilly and Manchester Airport.

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