Vesta Property | Investment Guide for Manchester | Vesta Buy To Lets

Welcome to Manchester

Manchester is known as the second city in England, a truly international destination, a vibrant city boasting diversity and opportunity with ambitious plans for the future.

7th most exciting city in the world (Timeout)

Manchester boasts one of the UK’s busiest housing markets so it’s no surprise that house prices in Manchester have grown more than anywhere else in the UK, beating the national average for five out of the six years since 2012.

In line with a growing population JLL anticipate that house prices will grow by 22.8% between 2018 and 2022 in Manchester, whilst rents will rise by 17.6% in the same period. This makes Manchester a stand out buy to let market with the opportunity for high capital appreciation and low void periods.

Manchester has been ranked 10th in the world as a destination for inward investment by IMB - ahead of some major global cities, and the most invested in city outside of London.

It has been celebrated the UK’s most liveable city and the world’s 35th most liveable city (thirteen places ahead of London) [by the Economist’s Global Liveability Index for 2018] Manchester has rightly earned its place as, and moniker of, the UK’s second city.

Tim Newns, MIDAS

Key Facts

PROPERTY SALES

+56%

Residential property sales in Manchester city centre increased by 56% year-on-year in the first half of 2018 and is predicted to grow by 22.8% by 2022 (JLL, 2018)

ECONOMY

£62.8 billion

Largest regional economy in the UK, equal to that of Leeds, Liverpool and Sheffield combined and growing faster than the UK (Invest Manchester, 2018)

POPULATION

2.8 million

People live in Greater Manchester and is predicted to increase by 19.7% over 13 years (ONS)

UNIVERSITY

99,000

Students study at Greater Manchester's 4 universities and a retention rate second to London (Invest Manchester, 2018)

CONNECTIVITY

22 million

Passengers are served each year and the airport is undergoing £1 billion investment to expand its facilities and terminal (Manchester Airport, 2019)

TOURISM

1.55 million

Tourists visited Manchester in 2017, +12.5% when compared to 2016 and +114% increase on 2002 (725k) and is the top 3 destinations after London and Edinburgh (Invest Manchester, 2018)

Population & Students

The city region has one of the largest student populations in the UK, not to mention in Europe.

2.79 million people live in Greater Manchester, of which 1.78 million are of working age (16-64); a growth of 7.2% (183,100) between mid-2004 and mid-2014. 40% of the city’s population are aged between 18-35 with a third employed in the financial or business services sector.

Manchester local authority saw its population grow by 16.9% (+75,300) between 2004 and 2014 – more than double the UK growth rate over the same period (7.8%).

A growing number of people are choosing to live in Manchester, with the population rising over threefold from 2001 to 2016. This trend is set to continue as the Northern Powerhouse gathers momentum with the city centre expected to reach 60,000 by 2027 - a tenfold increase.

The growing population can be attributed to the popularity of Manchester’s four universities; Manchester University, University of Manchester Institute of Science and Technology (UMIST), Manchester Metropolitan University (MMU) and Salford University, which have welcomed over 99,000 students to the city centre.

Greater Manchester has the largest travel-to-work area of any conurbation in the UK outside of London, with 7 million people living within one hour’s drive of the city centre. There are more than 20 universities within one hour’s drive of Greater Manchester, with over 400,000 students.

The University of Manchester is one of 11 UK universities in the top 100 globally and home to the ground-breaking National Graphene Institute and boats 25 Nobel laureates among its current and former staff and students, whilst MMU has the largest campus-based undergraduate population in the UK. The success of the Universities has led to significant investment in business sectors that create graduate opportunities and following graduation around 70% of MMU graduates remain in the region. This has helped boost the growth of the city’s 20-25 demographic by 40% since 2001.

The [resale property] market has been particularly strong this year, driven by Manchester’s high graduate retention rate – second only to London – and the fact that we’re seeing more young professionals relocate from the South to get on the property ladder.

Louise Emmott, residential director at JLL, TheBusinessDesk.com, August 2018

Economy

Manchester is forecast 3.5% GDP growth per annum to 2024 predicted to outperform the UK (2.8%) and global (2.5%) expectations

Manchester has the third largest economy in the United Kingdom and it is the third most visited city in the country by foreigners after London and Edinburgh.

According to Invest in Manchester, the ten boroughs of Greater Manchester combined make the largest city region economy outside London, with a gross value added (GVA) of £62.8 billion higher than the GVA of the North East (£45 billion), West Yorkshire (£46 billion), Merseyside (£27 billion), and accounting for nearly 40% of GVA in the North West.

Manchester‘s economy is one of the fastest growing in the UK and this isn’t expected to slow, with future projections forecasting that GVA will grow by 45% between 2016 and 2036.

There are 1.4 million people working in Greater Manchester in around 105,000 businesses. Around 110,000 additional jobs are forecast within Greater Manchester for the period 2014–24 by the Greater Manchester Economic Forecasting Model (GMFM). GVA is forecast by GMFM to rise by 2.8% per year between 2014 and 2024 – in line with the UK figure and above the North West annual rise of 2.6% – increasing to more than £72 billion by the end of this period.

Manchester is home to over 2,000 foreign owned companies, boasts 5.4% per annum growth in private sector office jobs over the last 5 years (London 3.8%) and is forecast 3.5% GDP growth per annum to 2024 (predicted to outperform the UK 2.8% and global 2.5% expectations)

Business & Employment

Manchester is a top destination for global companies with 80 of the FTSE 100 companies located there

Outside of London, Greater Manchester is the UK’s main centre for the financial or business services sector, employing 324,000 people and generating £16.2 billion of GVA annually. Key companies include Co-op Banking Group, RBS and BNY Mellon.

Health & Social Care employs 177,000 people generating annual GVA of £4.2 billion. Assets include The Christie and the UK Biobank.

Greater Manchester has the largest creative and digital clusters in the UK, employing 63,500 people and generating GVA of £3.1 billion each year. Key assets include MediaCityUK (home of the BBC & ITV) and The Sharp Project.

Manufacturing as a whole employs nearly one-in-ten residents in Greater Manchester (123,000). Around 54,000 people are working in advanced manufacturing, which generates £3.9 billion of GVA every year. Key companies include NXP, Siemens and Holroyd.

As well as big football clubs like Manchester United and Manchester City, the area is home to major sporting companies such as Adidas and Umbro and national organisations such as British Cycling.

Manchester is a top destination for global companies with 80 of the FTSE 100 companies located there.

We are one of the UK’s leading digital city regions and we must take advantage of that. Through the growth of e-commerce, online shopping, and home deliveries, the retail sector – a major employer for Greater Manchester – will quickly find itself at the forefront of technology and innovation.

Sir Richard Leese, Greater Manchester’s lead for Economy, Independent Prosperity Review

Location

Manchester is the 6th largest city in the United Kingdom and is a world-class business and investment location with all the benefits and attractions of a vibrant European metropolis.

Manchester is a city and metropolitan borough and the principal city in the Greater Manchester metropolitan county in North West England.

The geographical area of the Manchester City Region covers the ten local authorities of Greater Manchester - Bury, Bolton, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan – and stretches out to encompass areas such as Macclesfield and Warrington, comprising the expansive travel to work area for the conurbation core.

Connectivity & Transport

A highly connected city, at the heart of the Northern Powerhouse and easily accessible from all corners of the globe

Manchester has an award winning airport with a recent £800 million investment creating the Airport City Enterprise. It is the UK's 3rd busiest airport and welcomes flights from 200+ cities including San Francisco, Dubai, Mumbai, Beijing, Hong Kong, Singapore - to name but a few. Manchester airport welcomes over 22 million passengers and is undergoing a £1 billion investment project to enhance the experience, expand it's offering and a terminal extension.

The city is a key transport hub for Northwest England offering direct rail connections to Northern Powerhouse business centres. Over 60 trains per day travel between Manchester and London in only 2 hours and £43 billion proposed investment in HS2 is anticipated to reduce the north south divide.

Manchester has excellent local transport infrastructure and is undergoing a £2.1 billion investment programme which is expected to provide approximately 40,000 jobs and boost the local economy by £5.5 billion. The metrolink serves 55,000 passengers each day and is undergoing an upgrade and expansion to further serve the region.

The cities motorway network places Leeds, Liverpool and Birmingham within easy driving distance.

We have worked hard over the years to secure routes to the likes of Beijing, Hong Kong, and Oman. As we continue to expand our network in 2019, we are also pressing ahead with the £1bn transformation of the airport and excitement is really building. It will offer an enhanced experience for the 22m passengers in our catchment area and the terminal extension will open the following year.

Andrew Cowan, CEO of Manchester Airport (February 2019)

Property Spotlight

Manchester boasts the highest overall yield, price forecasts and capital gains growth outperforming elsewhere in the UK

Much like Liverpool, its North West neighbour, Manchester has sprung up with low average house prices, high rental yields and positive capital appreciation projections that have turned the heads of property investors.

A growing number of people are choosing to live in Manchester, with the population expected to rise tenfold as the Northern Powerhouse gathers momentum with an anticipated 50,000 new homes needed to match the growth of the city by 2040. 

The levels of private renting across Greater Manchester increased by just over 62% between 2001 and 2011, now accounting for 16% of all households. This increase in the level of private renting has been particularly pronounced in Manchester, increasing by 85%, accounting for over 28% of households.

The latest property price index figures put Manchester sixth in the UK’s 20 largest cities. Capital appreciation growth for the 12 months to the end of December 2018 came to 5.8% against a national average of 2.9%.

Residential property sales in Manchester city centre increased by 56% year-on-year in the first half of 2018 and is predicted to grow by 22.8% by 2022, according to research by JLL.

Cushman & Wakefield reported that house prices in Manchester have increased more than anywhere else in the UK, exceeding the UK average in five out of the last six years [published in November 2018]. The report showed average house value in Manchester rose 11%, against a regional average of 6%, and a UK average of just 5%.

Manchester’s rental market is also rising higher than in any other UK city. Rents were up by 10% to April 2018, compared to Leeds in second place at 8%.

Alliance Investments also recently compiled a list of Manchester’s rent statistics and found that the city has the highest yield average (5.4%) when compared to the rest of the UK. Rental prices are growing by 5.76% annually.

Whilst the city has the highest overall yield, price forecasts and capital gains growth, Totally Money's 2018 / 2019 buy-to-let index also found M13 and M14 are amongst the best rental spots in the country.

M14 ranks eighteenth overall, with an average rental yield of 7.07%. This postcode covers Fallowfield, Moss Side, Ladybarn, Rusholme and Victoria Park. Close to The University of Manchester — which has the largest student community of all UK universities — and two hospitals, property in the M13 postcode provides an attractive average yield of 6.89%.

HOUSE PRICE GROWTH

+ 27%

House prices in Manchester have grown by over 27% in the last five years (Zoopla, February 2019)

POPULATION GROWTH

+ 149%

Manchester’s city centre population grew by 149% from 2002 – 2015 (Centre for Cities, 2018)

OPPORTUNITY

22.8% growth

Industry experts are expecting house prices in Manchester to grow by 22.8% between 2018 and 2022 (JLL, 2018)

A fundamental driver in the popularity of the North West as a region in which to invest has been price. Price points perceived as affordable, particularly from an emergent overseas market and a somewhat overpriced, oversaturated London investor market, have proved popular with buy-to-let investors

Julian Cotton, associate director at Cushman & Wakefield.

House Prices

Median sale values stand at £168,000, below the UK average of £216,600 rising 5.8% in the previous 12 months, outperforming the UK of 2.9% (Hometrack, December 2018)

The earnings to house price ratio in Manchester has increased from 6.1 to 6.5 (This is Money, 2018)

Rental Yield

Manchester’s rent statistics and found that the city has the highest yield average (5.4%) when compared to the rest of the UK. Rental prices are growing by 5.76% annually (Alliance Investments, 2018)

Demand

The levels of private renting across Greater Manchester increased by just over 62% between 2001 and 2011, now accounting for 16% of all households.

This increase in the level of private renting has been particularly pronounced in Manchester, increasing by 85%, accounting for over 28% of households.

Price Paid

Median Price Paid (previous 5 years)

Median Sales Listings (previous 5 years)

REalyse - Data accessed 19/02/2019

Asking Rent

Asking Rent (previous 5 years)

Rental Listings (previous 5 years)

REalyse - Data correct as of 19/02/2019

Property Overview

Overview by property type (12 month average)

Rent asking by property type

REalyse - Data correct as of 19/02/2019

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Glossary

£/sqft Paid

Median sold prices on a £/ sq ft basis by property. Calculated by combining Land Registry data with property listings and EPC data to determine the number of rooms, type, size and sales values. Updated monthly in arrears

Price Paid

Median sold price by property type. Data from Land Registry. Updated monthly in arrears.

Discount

The difference between the median asking price and median sold price by property type. Calculated by matching property listings (data from c. 20 different sites and agents) with sales records from Land Registry. Updated monthly in arrears.

Gross Yield

Median gross yield by property type. Calculated from the asking price data for asking rent properties of a similar type (data from c. 20 different sites and agents). Updated monthly in arrears.

Supply

The average number of property listings for sale (from c. 20 different sites and agents). Updated monthly in arrears.

Transactions

The average number of sales recorded by the Land Registry (data from c. 20 different sites and agents). Updated monthly in arrears.

This report was written in February 2019 and is based on evidence and data available to Vesta Global Ltd at the time. It uses certain data available then and reflects views of market sentiment at that time. Any forecasts or projections of future performance are inherently uncertain and liable to different outcomes or changes caused by circumstances whether of a political, economic, social or property market nature.

Please contact Vesta for sources.

Important Note

All information contained in this website is provided as a guideline only, is based on estimates and assumptions, may not be accurate or complete, and is subject to change. We make no representations or warranties with regards to this information, expressed or otherwise. A buyer who relies on such information does so at their own risk. Buyers are advised to seek independent financial advice and should undertake their own due diligence.

Your capital is at risk. Property values may decline and the property might not be able to be rented at amounts sufficient to cover debt interest costs, operating expenses and liabilities, and might not result in a positive cash flow. Property is an illiquid asset and should not be viewed as a short-term investment.

In no event will we be liable for any loss or damage, including without limitation any loss or damage arising directly or indirectly out of or in connection with the use of this website and the information contained therein.

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