As one of the highest performing property markets in the UK in recent times, the Manchester property market has firmly established itself as one of the most lucrative and promising areas for investment in the country, with buy to let properties leading the way in terms of particularly profitable investment opportunities.
Although average house prices are expected to fall across the UK in 2023, the value of property in Manchester and the North West is expected to see the most significant growth between now and the end of the decade.
Contributing to this sustained growth are a number of key factors, namely supply and demand; major investment and regeneration; a growing graduate population and exceptional career opportunities stemming from increased foreign direct investment.
Central to all of this however, is the evolution of the city into a diverse, innovative and globally competitive economic hub in which workers are keen to remain, making the Manchester property market one of the most profitable and assured areas to invest in 2023.
The Manchester Property Market - Forecast 2023
Recent Trends & Future Predictions
The value of property in Manchester has been growing steadily in recent years, a trend that experts expect to continue for the foreseeable future. While Manchester has quickly become the second most desirable city to live in the UK outside of London, property prices have remained relatively low compared to the rest of the country.
At present, the average property price in the city is £221,485 while the average price among Manchester’s central M1 to M5 postcodes rests at just over £260,000. This is a dramatic £445,000 lower than the average asking price in London and around £36,500 lower than the UK average.
Importantly, the transformation of Manchester into a globally competitive economic and technological hub has led to a sustained period of rental growth, making investment in the city’s property market both safe and highly profitable at present.
With the question ‘are house prices falling in Manchester?’ In the minds of many investors, it’s important to note that while property prices are expected to drop across the UK in 2023, this isn’t expected to last, with the Manchester property market forecast to increase by 19.3% over the next five years. Additionally, experts predict an average price growth of 11.7% in the North West over the next five years, where Manchester is the key driving force and Liverpool is also performing exceptionally well.
The Rental Market
• 21.6% rise in rental value growth in next five years
• Average rent - £1,350
• Average rental yield - 5.17%
In addition to a sustained increase in the value of property across Manchester, the city is set to have a 21.6% rise in rental value growth over the next five years, the strongest growth forecast in the UK. This is thanks largely to an increase in young professionals keen to work in Manchester’s growing tech sector.
The average rent in Manchester is currently around £1,350, which is almost £200 higher than the UK average, while property prices in the city remain slightly lower. This is generating average rental yields of 5.17% compared to 4.71% across the rest of the country.
If rental growth in Manchester continues as experts predict, investors could be earning average rental incomes of around £1,600 per month by 2026. Again, this suggests that in the current UK property market Manchester is the place to invest and with property prices set to fall briefly this year, 2023 may just be the optimum time to enter the market.
Reasons for Success
The recent and sustained success of the Manchester property market is by no means a fluke or indeed something that took place over night. Instead, it’s a combination of equally important factors and long-term developments that have made Manchester the desirable area of investment that it is today. So why are house prices going up in Manchester? Well, why don’t we take a quick look.
Redevelopment & Regeneration
In recent years, Manchester has played host to a stream of regeneration projects that are now worth hundreds of millions to the city’s economy annually. As well as providing a major economic boost to the city, such developments have created thousands of jobs, enticing a skilled workforce to remain in Manchester and many more to move there.
One such development is the impressive MediaCityUK, situated in Manchester’s Salford area. Now home to both the BBC and ITV, MediaCityUK is a prime example of a previously unprofitable property market Manchester has transformed into the headquarters of the two biggest media corporations in the country.
Growing, Highly Skilled Workforce
Thanks largely to a thriving economy propelled by major investment projects like the Media City development, Manchester has experienced the largest population growth of the past ten years among the UKs six largest cities.
A significant portion of this demographic has been young, highly skilled professionals keen to work in the city’s booming tech industry. Many of these are former students who attended University in Manchester and have opted to remain there to work, a trend that will continue to significantly boost the city’s property market in the future.
Supply & Demand
Together, a growing economy stemming from an array of major investment and regeneration projects, along with a steady influx of workers keen to live in the city, has created a demand for high-quality rental accommodation that is sure to remain for some time.
At present, the ratio between supply and demand is estimated to be 1:5, with the population of the city set to increase to 635,000 in the next three years, giving significant weight to predictions of Manchester property market forecast growth in the coming years.
Career Opportunities & Foreign Direct Investment
With a city centre economy valued at over £6 billion, Manchester is the economic powerhouse of the North West attracting hundreds of millions in foreign investment every year. The presence of some of the world’s leading multinational companies, namely Microsoft, Google and Amazon, has attracted a young, highly skilled workforce to the city ensuring a long-term demand for high-quality, central accommodation.
On the back of this investment from some of the world’s leading companies, Manchester has become one of the UK’s fastest growing cities, with a 34% growth recorded over the last decade. In addition, Manchester has recently been named the fastest growing tech cluster in Europe, with a 277% growth in the city’s technology sector recorded in just one year.
So, is it a good time to buy property in Manchester? All the signs are certainly pointing the right way. After the brief fall in prices that’s expected throughout the country this year, the value of Manchester property is expected to grow at a rate greater than the UK average over the next five years, making now a great time to invest.
Property Spotlight
Embankment Exchange
If you like the look of these current trends and future forecasts for the Manchester property market and are serious about making an investment, the riverside Embankment Exchange development presents an exciting opportunity.
Offering luxury living spaces in a practical location right in the heart of one of Manchester’s bustling business districts, the Embankment Exchange apartments are ideal for the young, affluent workforce now looking for rental accommodation in the city.
With premium apartments available from just £225,950 and estimated rental returns of an impressive 6%, the Embankment Exchange presents a potentially lucrative investment opportunity in a district that is in no shortage of demand for top of the range apartments.
Contact us today to enquire now and access the best available units in this investment property.
