Why are investors shifting away from London and looking to invest in Manchester?
With a population of 2.6m, Manchester is the second largest economic hub after London. Set firmly on a bedrock of strong fundamentals, property investors are flocking to this area for one overarching reason: higher rental yields.
Media Hub and Northern Powerhouse
Thanks to regeneration efforts by the government, Manchester’s economy has received a massive boost in sectors such as engineering, financial services, technology, broadcasting and media.
Manchester’s Media City has become the UK’s Media Hub with companies such as ITV, Granada and most recently BBC relocating their offices from London to Manchester. This move has not only brought a large population of skilled workers into the city, but also contributes approximately £300m per annum to the economy.
This Media City Hub and contribution of the BBC is an integral part of the Chancellor George Osbourne’s plans of turning Manchester into the ‘Northern Powerhouse’.
Manchester’s accessibility to the rest of the world is another reason to consider investing in the city. It is well connected by air, road and rail.
Outside of London, Manchester International Airport is the UK’s largest airport with over 20 million passengers connecting through to more than 200 destinations, some of which include New York, Hong Kong and Dubai.
The recent announcement of the £1bn investment expansion of this airport will allow extra 10m passengers to travel through per year.
Manchester is the Northern Hub of the UK’s rail network and has direct train links to several major cities, as well as a 2 hour Express Service to London.
Another key reason to invest in Manchester is the HS2 which is currently under construction. The High Speed 2 rail network will link Manchester and Leeds to London via Birmingham. This will shorten the journey time from Manchester to London by half.
As we’ve seen else where in the country, strong connections with transport creates an uptick on property value and equity.
Increased demand for accommodation
Approximately 80% of the FTSE 100 Companies reside in Manchester, which attracts more multinational companies to set up in the city. While business hubs such as Spinning Fields, Trafford Park and Media City receive international attention, more businesses are drawn to Manchester.
This growth creates a demand for accommodation, which is one of the drivers behind property value increases. Manchester is an opportunity for investors who are seeking capital gains.
High demand for rental housing and a low supply of housing stock has created record occupancy rates, which is an ideal situation for buy-to-let landlords. It is estimated that approximately 27% of the housing stock in Manchester is privately rented.
Well recognised as an investment prospect
HSBC selected Manchester as the top city for property investment in 2015, reporting the highest rental yields in the country at 7.98% and a strong rental demand. This outperforms London, where the capital’s hotspot: Newham, East London provided yields of 5.2%.
Manchester is an excellent location for investors seeking property investments that will outperform any other property market in the UK.
For more on Manchester and other property hotspots, explore our Properties by clicking here.