Manchester is booming. The Northern Powerhouse city has become the UK’s biggest and best success story of recent times. The latest research indicates that Manchester is outperforming every other city in the UK when it comes to property prices. The news is a boon for Manchester’s property investors, with the city hitting levels of capital appreciation unmatched across the UK.
The latest property price index figures put Manchester at the top of the UK’s 20 largest cities. Capital appreciation growth for the 12 months to the end of June 2018 came to a staggering 7.4% against a national average of 4.6%. By comparison, over the same 12-month period, London’s capital appreciation grew by 0.7%; one of the smallest figures in the country. Liverpool and Birmingham rounded off the top three with 7.2% and 6.8% respectively; further indication that the North of England is quickly becoming a viable economic contender for the capital. As a result, Manchester really can lay claim to be the UK’s ‘second city’.
During the first half of 2018, sales of residential properties in the city grew by an incredible 56%. Alongside that, house prices across the year are set to grow by 6.5%, well above the national average of 3%. Further growth of 22.8% is predicted to occur in the next four years up until 2022.
Moreover, the average price of a two-bedroom flat rose by 8.7% through 2017 with rents climbing by 3.2% during the same period. Rental rates are facing a projected 40% increase ahead of the UK average by 2022.
The Manchester property boom is aided and abetted by an incredibly strong market in purpose-built student accommodation (PBSA). Student developments have quickly formed the backbone of Manchester’s property economy and provide the platform for future growth and profitability.
Manchester has the UK’s second biggest student property market. Over the last five years the city has seen a 20% increase in the number of overseas students attending Manchester’s higher education institutes. This swell in the student body has further added to the ample demand for student accommodation that far outweighs the current supply.
Manchester already has nearly 24,000 student bed spaces, but more are sorely needed. The effect of demand exceeding supply has already seen a rise in prices in the city. Over 2017, the price of en-suite student bedrooms rose by 3%, while studio apartment rents increased by 5% over the same period.
High student numbers, impressive student retention and a huge population density in the city centre means the demand for high end luxury apartments and student accommodation is at an all-time high. Leading property investment firm RW Invest are one such company who find that demand for their properties is so high that developments are snapped up very quickly.
Manchester’s economic and property boom has also made great gains from growing Middle East and Chinese investment. The city’s long-term prosperity looks to be banking heavily on the influx of direct foreign investment that is bolstering Manchester’s property market.
Direct foreign investment from China has propelled a large part of Manchester buy to let property market. Chinese investors have been acquiring such properties in the city at an incredible rate, such is their enthusiasm to become financially involved with the region. As interest in investing in London wanes and the capital becomes too unwieldy and unpredictable of an investment prospect, Manchester has picked up the slack.
An incredible 256% rise in Chinese interest was recorded against the previous January. Market data suggests that a Chinese property investor will look to spend an average of £223,000 per property purchase. The average house price in Manchester falls at around £190,000; a stark contrast to London’s excessive average of £481,556. Consequently, foreign direct investment coming from China is well-positioned in Manchester’s property market and can look to make profitable acquisitions with costs lower than expected.
With overseas investment, the dizzying growth of the student accommodation market and the strong projections for capital appreciation and rental rates, it is evident that Manchester’s property boom has a bright future ahead of it in both the short term and long term.