In this exploration, we delve into the nuances of the rental market in Manchester by analysing the latest trends, outlining the challenges that both tenants and landlords encounter, and highlighting investment prospects. As we navigate through these statistics, it becomes evident that Manchester is not solely a city—but a thriving ecosystem of growth and potential.
Growth of the City
Deemed the UK’s ‘Northern Powerhouse’, Manchester’s diverse economic sectors—including finance, technology, and healthcare—contribute to increased demand for residential and commercial properties, fostering a robust rental market. In June 2023, the cost of renting an apartment in Manchester increased by 19.6% annually according to JLL—outpacing all other ‘Big Six’ cities in the UK in terms of rental growth. Factors such as heightened demand and landlords divesting their properties have contributed to this phenomenon.
Locations such as Ancoats, Salford Quays and the Northern Quarter have undergone substantial urban regeneration, attracting property developers and investors. This revitalisation has not only enhanced the aesthetic appeal of these areas but also contributed to the overall growth of the rental market.
Surge in Student Accommodation
Manchester’s status as a hub for global students has driven a surge in purpose-built student accommodation developments. With approximately 498,000 students within Greater Manchester in 2022/23 (an increase of more than 40,000 since 2015/16) the demand for high-quality housing options near campuses is on the rise.
This trend has transformed student property investment into a highly lucrative venture with projections indicating a growth of almost 12% in certain areas by 2027.
Salford is a prime student location that has undergone massive regeneration including improved transport links. Conveniently positioned next to the University campus, Cheltenham Place comprises luxury studio apartments which are ideal rental properties for professionals, graduates and students. This development is offering a 7% net rental return for ten years, making it a compelling venture for investors looking to take advantage of Manchester’s booming property market.
It is crucial to acknowledge the challenges that both tenants and landlords navigate in Manchester’s dynamic rental landscape. For tenants, the path to securing suitable housing is often hindered by challenges such as affordability, limited housing options, and the ever-intensifying competition for rental properties. With the surge in rental growth, reaching 13%, tenants can expect to pay an average of £1,104 within Manchester’s city centre.
Landlords, on the other hand, have the responsibility of maintaining properties, managing tenant turnover, and staying compliant with regulations. Property maintenance demands constant attention, and the relentless pace of tenant turnover can pose challenges in sustaining steady rental income.
However, amidst these challenges lies a silver lining. The rental market in Manchester has demonstrated resilience, buoyed by factors like economic growth and urban revitalisation, providing a robust foundation for investors. Affordability challenges are countered by the city’s diverse housing options, and the intense competition propels landlords to enhance property quality.
For tenants, this competitive landscape fosters a market where their needs are prioritised, leading to a broader range of high-quality housing choices. As the rental market in Manchester continues to evolve, the challenges encountered by tenants and landlords become stepping stones rather than stumbling blocks. Each challenge offers an opportunity for growth and improvement, ultimately contributing to the resilience and adaptability of this thriving real estate landscape.
For investors seeking growth and development, Manchester offers promising areas and potential infrastructure projects. Ranked as the number one buy-to-let location in 2023 for long-term property growth, driven by strong tenant demand with a third of residents renting privately, Manchester remains a strong investment opportunity. Investors are drawn to Manchester’s resilient property market, stable rental yields and potential for capital appreciation. The city’s property is 25% cheaper than the national average, offering an affordable market entry point and a diverse range of choices for investors.
As the city’s employment soared by 84% from 2002 to 2015, Manchester’s rental market not only reflects current success but also a promising future marked by sustained growth and prosperity.
Manchester’s rental landscape is full of lucrative opportunities. From purpose-built student accommodations to newly developed neighbourhoods, the city remains an exciting canvas for those seeking to invest.