How do you know which markets are worth investing in?
We hear this question often and wish there was a simple response. Unfortunately, that’s not the case. When our team of investment experts reviews global markets, there are all sorts of factors that contribute to their evaluation; population growth, infrastructure, and current levels of housing demand are just a few of the key points they research. One must also bear in mind that markets need to be reassessed each year, as they are constantly changing.
It is this careful process which makes it all the more thrilling when we encounter a new market that holds great potential for our clients. This year we’re very excited to expand our offerings for buy-to-let properties in Manchester, a region that continues to go from strength to strength.
In recent years we’ve seen impressive development across Greater Manchester, demonstrated most simply by the 2.4% GVA growth per annum forecast for 2017-2037. Increasing levels of investment, thriving economic growth, and a vibrant cultural scene make this region one that property investors cannot ignore. Forecasts for the region’s property market are strong, with population growth and regeneration initiatives driving prices upward – alongside a demand which is relentlessly increasing.
It is these facts that make the county, including the cities of Manchester and Salford - as well as smaller, developing towns such as Stockport and Altrincham - a key region within our 2019 UK investment strategy.
A Promising Investment Case on All Fronts
A leading destination for international business, with a thriving population of 2.8 million, Greater Manchester continues to attract new residents. Already the second most populated urban area in the UK after London, Greater Manchester is projected to grow by an additional 7% between 2023-2035, to realize a population of over 3 million.
Over 100,000 students attend Greater Manchester’s four universities each year, making the region home to one of Europe’s largest student populations. The area also has one of the UK’s highest retention rates for students, outside of London, contributing greatly to the workforce within the Northern Powerhouse area. Manchester has seen an increase in employment compared to the previous year. The employment rate in February 2024 was found to be 73.6% (ages 16-64).
The growing number of young residents, combined with the quality of the area’s higher education institutes, led to Manchester becoming the first UK city to be shortlisted for the award of European Youth Capital, in 2018. This vast University talent pool has also proven to be a major pull factor for international companies looking to expand in the UK, making it a lucrative investment area for buy-to-let properties in Manchester.
Foreign Investment
Manchester solidified its position as a centre for investment and economic growth by topping Large UK City for Foreign Direct Investment in the FDI Intelligence European Cities and Regions of the Future 2024. Numerous new businesses have been attracted to the Manchester city region - including Amazon, GCHQ, and Jaguar Land Rover. Amazon has selected Manchester as the location for its first major UK hub outside of London, taking over 90,000 square feet of office space and creating 600 jobs.
Booking Holdings, the technology company behind the hotel website Booking.com, has also recently focused on Manchester, investing GBP100 million and acquiring 220,000 square feet of offices. Commenting on the move, Ian Brown, CEO of Booking.com’s transport division, said, ‘We are committed to the city of Manchester and its future as one of Europe’s largest and most important tech hubs.’
The growth in foreign investment is another reason why buy-to-let property investment opportunities in Manchester should be highly considered, as they could be a way to grow your capital quite rapidly.
Improving Transportation Infrastructure
Manchester is ranked in the top five in the Top Large UK city overall, Top Large UK city for Economic Potential Category, and Top Large UK City for Business Friendliness. Graded on both local and international travel connectivity, as well as the overall quality of infrastructure, the area’s recent developments make the ranking well-deserved.
Manchester Airport, the UK’s largest regional airport, handles over 22 million passengers a year and offers direct flights to international destinations including New York, Paris and Qatar. The region recently secured a direct air route to India and 2018 marked the second anniversary of a direct Beijing air route, which has already increased export sales from Manchester to China by 41%, up to GBP 1.29 billion.
Given the rapid rate of population growth, the government has prioritized improving the county’s transportation infrastructure. Currently, more than 5.6 million journeys are made across Greater Manchester’s transport network each day and this number is only expected to increase.
An impressive 2040 Transport Strategy was established in 2015 to help manage the region’s growth. Improvements to the Manchester Metrolink, the largest transport network in the UK, as well as bus routes and road repairs, have been outlined.
Regeneration
Greater Manchester sits at the core of the GBP7 billion Northern Powerhouse initiative, announced in December 2014. Aimed at drawing attention to the north of England and boosting local economies, this project is focused on business, cultural, and infrastructure developments. The plan has specifically allocated GBP98 million in funding for cultural and leisure aspects in Manchester and GBP3 million for housing within the city including buy-to-let property in Manchester.
Following the announcement of the Northern Powerhouse initiative, impressive growth has been seen within Manchester. The city’s NOMA area is undergoing a complete renovation, using GBP800 million in funding to create 2.5 million square feet of office space, 1,158 new homes and 400,000 square feet of shopping and leisure facilities.
The city will also unveil the Manchester Metropolitan University School of Digital Arts (SODA) in 2021. The university has received a GBP35 million investment to realise the innovative school, set to accommodate 1,500 students each year.
Housing Supply And Demand: Buy-To-Let Property In Manchester
As Greater Manchester continues to grow and welcome new residents, the area’s housing market has struggled to keep pace with demand. This has led to an undersupplied market and rising sales and rental prices.
The GMCA 2018 Greater Manchester Spatial Framework outlines that the county requires a minimum of 201,000 net additional homes to be developed from 2018-2037, to match the area’s demand.
The Greater Manchester Strategic Housing Market Assessment sets out an annual housing requirement figure of 10,583 new homes per annum for the whole of Greater Manchester. GMCA, however, has reported that since 2008, only approximately 3,000 new homes have been built every year in Greater Manchester, resulting in a shortfall of more than 8,000 units.
In reaction to this undersupply, we’ve seen prices across the county rise significantly. Between January 2012 - April 2024 the cost of flats in the county increased from an average price of GBP99,299 to GBP242,000. This is a positive outlook for all buy-to-let property investment opportunities in Manchester.
Which Greater Manchester Markets Deserve A Closer Look?
Altrincham
Altrincham is a modern market town with a thriving business community. Attracting some of the highest property prices outside of London, the town is an established area for residential investment. Significant public and private funding has enhanced the area in recent years, with a new general hospital, large retail outlets, and a multi-screen cinema being realized.
Known for its affluence and younger demographic than the rest of Trafford, recent developments are also helping entice new residents meaning that there is a greater need for buy-to-let properties in this Manchester suburb. In 2018, Altrincham was ranked as the best regional place to live in the UK.
- GBP22.4 million has been invested to realise a new leisure centre, greatly benefiting the community. The Trafford Council has also established a programme to offer small business loans of up to GBP200,000, to help reinvigorate entrepreneurship.
- Altrincham’s redevelopment efforts were celebrated in 2018 when the town was named England’s best high street.
- In 2014 a GBP19 million investment in infrastructure regeneration helped ensure the town is easily accessed by public transport.
Stockport
Stockport, a town located in the south of Greater Manchester, is one of the region’s most prosperous boroughs. It has a GBP8 billion economy, over 13,000 operating businesses and a growing population of 295000.
Positioned only 11 km south of Manchester’s city centre, the town’s investment appeal is continually increasing. Stockport offers a high quality of life and excellent connectivity both with the rest of Greater Manchester and other regions and significant inflows of government funding are only adding to its established status and reshaping the town.
- Stockport currently has GBP1 billion in regeneration initiatives reshaping its infrastructure and town centre, adding 5,000 new jobs and 1,100 new homes.
- The town affords remarkably accessible prices when compared to the rest of the county – Stockport’s average flat costs GBP149,38 compared to the county’s average of GBP173,859, equating to a 16% savings.
- According to Oxford Economics, from 2011 to 2018, the average property price in Stockport rose 62%.
Salford
Located adjacent to Manchester’s city centre and home to a population of 298,270, Salford is a major city in the North West.
Connected by exceptional road and rail networks, Salford’s population and investment appeal continue to grow. Since 2001 the city has seen a 29% increase in population based on Oxford Economics data, and in 2022 alone there was a 9.6% increase in employment, drawing students and young professionals who require the convenience of a central, vibrant location at a lower price point than Manchester city centre.
Salford’s present housing supply is unable to match the city’s growing demand meaning that there is a growing need for buy-to-let properties in Manchester town. Between 1 April 2015 and 31 March 2035 there will be a net increase of at least 34,900 dwellings in Salford, an average of 1,745 dwellings per annum. Currently, 16,000 new homes have been built in the city over the period 2014-2023.
- House prices in Salford remain competitive while experiencing significant growth.
- According to Zoopla, prices for flats in the city are currently about the same as the Greater Manchester average, while overall property prices are 16% more affordable.
- Salford plans to invest over GBP100 million in the Building Schools for the Future (BSF) programme and in new community facilities. New LIFT health centres will be opened in Walkden (GBP9.1 million investment) and Eccles (GBP10.7 million investment) between 2008-2028, providing integrated services including libraries.
- The city’s overall GVA is forecast to increase by 27.6% by 2036 based on the Oxford Economics data.
