Why greater affordability in central Manchester than commuter towns is good for property buyers and investors.
- Average property prices are lower in central Manchester than those found in a number of ‘commuter towns’ on the outskirts of the city
- Demand for rental property in Manchester city centre continues to rise, with yield growth 13 times faster than London in recent years
- Greater affordability can help investors to maximise returns in the face of sustained rental demand
Property investors looking at the UK’s buy-to-let hotspot should focus their attention on the city-centre rather than the outskirts.
Average prices in Manchester are lower centrally than they are in a number of a ‘commuter towns’, the latest research by Lloyds Bank has found.
Naturally commuters and investors alike might assume that greater affordability can be found outside of the heart of the city. But in towns within easy reach of Manchester, such as Warrington, Macclesfield and Huddersfield, average prices are £168,000, compared to just £151,330 in Manchester.
This is in contrast to a number of cities in the UK. In London for example, buyers in commuter towns such as Reading and Stevenage can save as much as 52% over buying property in the capital.
Of course, these figures should please those looking to get a foothold on the property ladder in Manchester, particularly those that work in central Manchester.
But the data should strengthen investor confidence in the city, with greater affordability in the face of sustained rent growth and demand enabling them to achieve higher returns.
Rental demand in Manchester is at record levels, with rents in the city growing 13 times faster than London in recent years. Letting agents in the north-west, including those in Manchester, also saw the biggest increase in enquiries for short-term lets in June, as a growing population and an uplift in visitor numbers has driven occupancy levels at accommodation types such as hotels and serviced apartments.
That demand looks set to continue in the coming years, as Manchester is to benefit from £7 billion worth of investment under the UK government’s Northern Powerhouse plans, an outlook that recently prompted Prime Minster David Cameron to encourage investment in Manchester from investors in the Far East.