Uncovering the 2024 UK Property Investment Hotspots

Manchester has for years stood out as one of the UK’s leading cities both for economic growth and for property investment opportunities. Named the world’s ‘most transparent’ property market in the most recent Global Real Estate Transparency Index, Manchester continues to attract the attention of buy-to let investors looking for strong capital growth potential and robust rental yields.

In terms of its property market, Manchester is enjoying house price rises that were larger than those in nearly any other UK urban area. This, along with its strong underlying credentials, is why so many investors have been drawn to the northern city in recent years.

Manchester’s housing market

According to the latest data from Zoopla (January 2024), the average sold price for a property in Manchester in the last 12 months is £248,314. Despite challenging economic conditions and rising interest rates, Manchester property values has remained relatively stable, increasing by 0.4% year-on-year. When compared to the average performance of property markets across the UK (-0.8%), this slight gain is not to be overlooked.

What is particularly interesting is that the increase comes despite the large-scale supply of new homes in Manchester over the previous year. That’s because even with the impressive flow of new properties onto the market, Manchester has a long way to go in terms of meeting demand.

According to JLL, the city’s average supply of homes for the past ten years has been 1,150 per year. Impressive, but a long way shy of the 2,500 homes that Manchester needs to build every year for the next ten years if it is to keep up with the needs of its growing population.

Buy-to-let investment

Greater Manchester’s private rental market has seen substantial growth in 2023, with an exceptional annual rental growth rate of 14%. A significant shift in tenant preferences, particularly towards one-bedroom flats, underscores these impressive figures. The affordability of these units, amidst ongoing cost-of-living challenges, has driven this trend, showing a distinct change in housing needs post-lockdown. Manchester, known as the UK’s second city, is a hub of employment and culture, attracting a young demographic between 20 and 29 years. The city boasts top-notch amenities, thriving nightlife, and significant job opportunities, especially in the fast-growing tech sector, housing successful firms like Boohoo and Booking.com. Furthermore, the city’s response to housing demand is proactive, with extensive plans to develop new urban areas like Victoria North. This £4bn scheme, set to construct 15,000 homes over 15 years, epitomises the ambitious growth of Manchester’s property market. Initiatives like these offer a wealth of investment opportunities for those keen to delve into the buy-to-let sector.

Economic strength

A recent EY UK Regional Economic Forecast revealed that Manchester is on track to become England’s fastest-growing major city between 2022 and 2025, with annual growth of 3.2% supported by gains in science and professional and administrative services. According to the ONS, the economic activity of Greater Manchester has contributed a GVA of £74.85 billion and has experienced the quickest growth rate among cities in the UK, apart from London, over the past two decades. Manchester’s ability to retain a high level of graduates is also set to help boost the city’s regional economic performance. EY suggests that increasing job opportunities and high graduate retention rates will cement its status as the UK’s fastest growing city between 2022 and 2025.

Underpinning principles – a robust city

With GVA growing at the second fastest rate in England and the city in the midst of a sustained population boom, Manchester has long been a leading light in the UK’s economy.

Key demographics

The Greater Manchester population has rocketed in the past 20 years. In 2000, the area was home to 2.35 million people. Now, its population stands at 2.73 million. With growth expected to continue at the same rapid pace for the next decade and more, Greater Manchester is looking at having a population of 2.93 million by 2030 and at easily surpassing the 3 million mark by 2035. These figures, taken from the UN World Urbanization Prospects, highlight the intense need for new housing that Manchester faces over the years ahead. JLL, meanwhile, observes how youthful the city’s population is, with 40% of residents falling into the 15-34 age group.

People in this age group are significantly more likely to rent their homes than those who are older. The 2018/19 English Housing Survey reports that 41% of people aged 25- 34 live in the private rented sector, compared to 10% of those aged 55- 64.

Business strength

Home to four well-respected universities, Manchester draws in young people from across the UK and beyond. Over the past decade, it has also drawn in a great deal of talent from London, with the number of people quitting the capital in favour of life in the North increasing rapidly. In 2009, just 1% of those leaving London settled in the North. Now, that figure stands at 13%. A key driver of the London exodus has been the largescale shift of employment opportunities to other cities. Manchester has clocked up some big wins in this respect, thanks in large part to the presence of MediaCityUK. One of the largest changes in Manchester over the past decade has been the creation and growth of the hugely successful MediaCityUK. Built on former industrial land, construction work on the 200-acre MediaCityUK site began in 2007. Now, the vast complex is home to a 7,000-person strong community of workers, residents and students. MediaCityUK has positioned Manchester – and specifically Salford Quays – as the UK’s premier media location. The BBC was the first to make the jump to MediaCityUK, with ITV, Ericsson, the University of Salford and some 250 other media and creative firms following suit. The area is now packed with complementary businesses, from waterfront restaurants, bars and shops to companies from a range of other sectors. Such was the site’s success that in 2016, planning permission was granted for MediaCityUK to double in size over the coming decade. The £1 billion expansion will include 2.2 million sq. ft of office, residential and leisure space Manchester is also home to leading financial, legal and business services companies, as well as specialist biotechnology, advanced manufacturing and environmental technologies firms. Of the 266,810 businesses in the North West, 104,110 of them are located in Manchester, according to the official labour market statistics for 2019. Manchester’s employment rate reflects its dynamic business environment, with the city leading the UK in terms of its employment growth. Home to the UK’s largest regional airport and famed for its sport and culture, Manchester is a strong player on the international scene in many ways. It was the UK’s third most visited city in 2019 (after London and Edinburgh), drawing in 1.7 million visitors over the course of the year. Manchester is also a magnet for foreign direct investment (FDI). EY and the Centre for Towns report that there have been 1,098 FDI schemes in the North West since 1997, with half of those located in either Manchester or Liverpool. For the 70 FDI schemes recorded in the North West in 2018, that figure rose to 64%.

Regeneration and renewal

Manchester is home to some huge regeneration and renewal projects. Since the 1990s, the city has been developing its infrastructure at an impressive pace. The early 1990s saw a new tram network introduced, while 1996-2002 saw a number of exciting new architectural projects completed, from a new Millennium Centre and a flagship Marks and Spencer to a bridge spanning Corporation Street. It is MediaCityUK that has been the runaway success story. Just 8-10 minutes by Metro from Manchester city centre, MediaCityUK has become a highly sought-after destination in its own right, offering the pace and vibrancy of city centre life but without the overcrowding and lack of space. This has had a significant impact on residential property values in the area. However, the prices have not yet matched Manchester city centre, which boasts over £550 psft. As such, there is still a large amount of room for capital appreciation for investments in MediaCityUK.

Why Choose Mistoria Group

The Mistoria Group knows the Manchester property market in depth. Our ethical, integrity-based approach to sourcing the best opportunities there ensures that investors can trust in the Manchester developments that we share with them. Our service delivery provides support every step of the way, from initial contact through to aftersales care.

When it comes to our investors, we want to deliver an outstanding experience at every point. That means insurance protected deposits, asset-backed properties and a lifetime after sales support service.

Arrange a call with John at our Worsley branch 0161 790 3999