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Manchester Property Market in 2024
Manchester's property market is projected to experience significant growth over the next few years, cementing it's legacy as an attractive hub for property investors. The city leads with a projected Gross Value Added (GVA) increase of 21.1% by 2032, the highest among major UK cities. This robust economic growth is expected to drive substantial demand in both the residential and commercial property sectors in accordance with JLL's Big Six Residential Development Report.
Manchester Key Buy-to-let statistics
- Economic Growth: Manchester is projected to see a 21.1% increase in Gross Value Added (GVA) by 2032, signalling a booming economy in accordance with JLL's Big Six Residential Development Report
- Property Price Growth: Property prices are expected to rise at an average annual rate of 3.3% through to 2026 - JLL Residential Forecasts
- Rental Market Growth: Average annual rental growth is forecasted at 2.6% until 2026 - JLL Residential Forecasts
- Build-to-Rent (BTR) Investments: In 2023, Manchester led BTR investments among major UK cities with £148.6 million invested - JLL Big Six Residential Development Report
Property Forecast Price and Rental Growth
Forecasts indicate that Manchester's property prices are expected to rise by an average of 3.3% annually through to 2026, while rental growth is anticipated to increase by an average of 2.6% annually during the same period (JLL Residential Forecasts, 2021). This steady growth is bolstered by Manchester's resilience and appeal post-vaccine, setting the stage for a promising investment landscape.
Manchester historic property price performance
The following information taken directly from the UK office for national statistics shows the cumulative house and rental for Manchester since 2018.
Analysis and Implications for Investors
- House Price Trends: From 2018 to 2023, house prices in Manchester have shown an impressive cumulative increase of 34.4%, with a notable peak growth rate of 8.6% in 2021. This trend illustrates significant capital appreciation potential.
- Rental Income Trends: Over the same period, rental incomes have grown by a total of 17.9%. The rental market's steady growth, with an annual peak of 4.2% in 2020, supports the viability of buy-to-let investments in Manchester.
Supply and Demand Dynamics
The city faces a significant undersupply of housing, with a need for approximately 5,000 new homes per year to meet demand, against an actual average supply of about 1,000 new homes per year since 2010. This supply-demand mismatch is expected to push property values and rental rates higher, benefiting investors (JLL Residential Forecasts, 2021).
UK Leading Build-to-Rent (BTR) Sector proves a strong indicator for investors
Manchester leads the BTR investment front among the UK’s major cities, with significant developments that continue to draw investor interest. In 2023, the city saw £148.6 million invested in BTR schemes, showcasing strong market confidence and a robust demand for rental properties. With 11,400 operational BTR units and more in the pipeline, the sector's vibrancy is a clear indicator of Manchester’s appeal to tenants and investors alike.
Manchester Key Projects and Infrastructure Development
Manchester's infrastructure developments, such as the expansion of the Metrolink and the Northern Powerhouse initiative, are crucial for supporting the growing population and enhancing property valuation. These projects are not only improving connectivity across Greater Manchester but are also pivotal in transforming the city into a dynamic hub for businesses and professionals.
Tenant Demographic Trends
Manchester's demographic profile is notably youthful, with 60% of its population under 35, predominantly consisting of young professionals who represent a significant portion of the UK rental market. This demographic is likely to rent for extended periods, offering a stable tenant base for buy-to-let investors. Moreover, the city's cultural and lifestyle offerings, from its rich array of cultural institutions to its vibrant nightlife, enhance its attractiveness as a place to live and invest.
Cultural appeal drives tenant demand
The city's strategy to attract high-value industries such as digital innovation, creative arts, and finance is enhancing its economic stability and cultural vibrancy. Recognitions like being listed as one of the coolest neighbourhoods globally by Time Out and featured in National Geographic's "Best of the World 2023" highlight Manchester's global appeal and contribute to its growing tenant demand.
Buy-to-let Outlook
For buy-to-let investors, the combination of a strong economic foundation, continuous infrastructure development, and a youthful demographic provides a potent mix for sustained growth and investment. With property prices expected to rise by 25.8% and rental prices by 13% over the next five years, there is a strong case for investment into the Manchester property market.
Key Areas in Manchester for Property Investment
Ancoats
Ancoats is celebrated for its dynamic blend of historical industrial charm and modern urban lifestyle, attracting young professionals and foodies. Ancoats has been featured consistently as one of the coolest neighbourhoods globally by Time Out. Its ongoing regeneration includes numerous new residential developments, enhancing its attractiveness for buy-to-let investments (Time Out Worldwide) (The Manc).
Salford Quays
Home to MediaCityUK, Salford Quays is a prime area for investment, particularly attractive to media and technology professionals. The area's transformation into a residential and commercial hub has been marked by high rental demand. Investment potential in Salford Quays is particularly high, evidenced by its continued development and the presence of major corporations, which sustain its rental market.
Northern Quarter
The Northern Quarter is renowned for its eclectic mix of music, arts, and fashion. This area attracts a demographic that values lifestyle and convenience, making it a hot spot for rental investments. The proximity to the city center and cultural vibrancy ensures a steady demand for rentals, which is attractive to investors looking for areas with high tenant retention.
Manchester City Centre
Manchester City Centre remains a focus for property investment due to its unyielding demand driven by extensive redevelopment projects and a comprehensive transport network. Its dynamic environment attracts a diverse tenant base, from students to high-income professionals, making it a robust area for buy-to-let properties.
If you require factual, current and professional investment advice from a company that cares about your money as much as you do – then get in touch. Our team of Manchester Property Investment specialists will give honest, clear and tangible advice that has your best interests at heart. Get in touch today for a free, no obligation consultation.
Data Sources & further reading
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