Buy-to-let landlords in the UK are achieving the highest rental yields from their Manchester property investments, as the city continues to enjoy surging popularity amid exciting regeneration.
The North West city of Manchester has once again been named as the highest-yielding city in the UK when it comes to rental property, with new research from Cohab putting the average rental yield from Manchester property investments at 6.35%.
This follows on from figures showing that Manchester property investments have seen the greatest level of capital appreciation over the past five years, while the five-year forecast from Savills points towards the North West region having the greatest property price gains overall.
The city was also named the top investment destination in England for a second time in the latest report from investment management company Colliers, which noted: “Manchester continues to be a world-class city region, offering a fantastic environment for living in and for businesses to grow and prosper.
“Home to an £80 billion economy, global transport connectivity, incredible talent from the largest student population outside of London and high-quality business properties, it is a first choice investment destination for leading international brands.”
Success story in buy-to-let
Other high-yielding locations in the UK, according to Cohab, are Merthyr Tydfil in Wales with an average rental yield of 6.28%, along with Portsmouth on the south coast (6.21%). The fourth-placed top spot was Newcastle with average yields of 6.02%, while Salford which neighbours the city of Manchester achieved fifth place with average landlord yields of 5.91%.
The report also found that while London remains one of the lowest-yielding areas in the UK due to its high property prices in relation to rents, there have been some rapid improvements in some parts of the city.
For example, the City of Westminster has seen rental yields climb by 1.36% annually, bringing them to 4.38% on average, while yields in Kensington and Chelsea have risen by 1.08% year-on-year to 3.88%.
Saveli Kotz, founder and CEO of Cohab, points out that while the government has not done enough to help the buy-to-let sector, it continues to offer “an abundance of opportunity for bricks and mortar investors”.
“Manchester has certainly been one success story highlighting how investment and job creation can drive prosperity across the rental market, but for the nation’s landlords, the ability to maximise their investment remains imperative.”
Targeting Manchester property investment
With its below-average house prices that consistently show some of the strongest gains in the country, multiple extensive regeneration and transport improvement projects in and around the city, and exceptional rental demand from students, graduates and young professionals, Manchester property investment has become a key strategy for landlords looking to diversify their portfolios.
While the city centre offers a wide array of investment opportunities often targeting young professional renters seeking high-quality and well-connected accommodation, locations on the outskirts can offer extremely competitive yields having become more attractive to commuters looking for more space, particularly in light of the rise in hybrid working.
This has boosted the popularity of places like Salford, as well as Stockport slightly further afield, where both investors and tenants can get more for their money while also benefiting from a rapid improvement in the amenities on offer in these locations.
The Manchester property investment outlook is set to be further boosted by an upcoming £10bn investment in all 10 boroughs of Greater Manchester as part of a 10-year ‘Growth and Prevention Delivery Plan’. Funds are set to be funnelled into aspects like transport, housing and innovation, while creating more collaboration between developers, investors and construction companies.
If you’re looking for your next Manchester property investment opportunity, get in touch with BuyAssociation today to find out about our current and upcoming projects in the area.
