Manchester ranks as the best city in the UK for buy to let investment

Our latest Buy to Let City Tracker 2020 reveals Manchester ranks as the best city in the UK for buy to let investment. Our Tracker looks at 50 cities across the UK to help landlords understand the top places to invest in. And the latest wave of the research sees Manchester move up from second place in 2019. Oxford is knocked off the top spot it held in 2019 and now sits in 4th place, while Cambridge has made the biggest jump from 8th in 2019 to 2nd in 2020.

Manchester being number one comes as no surprise to me, as strong demand for housing across Manchester has resulted in a construction boom, with demand continuing to outweigh supply.  The skyline of the city is constantly changing with over 25 buildings of more than 20 storeys having been added over the last 14 years.

And although Manchester has experienced stricter lockdown measures than other parts of the country, rapid economic growth and significant investment in commercial and residential developments over the past five years, has made it a desirable and affordable city to live in.

Manchester has become one of the biggest economic investment hotspots outside of London in recent years as it’s become a city of culture, music, startups, new media and trendy shopping districts. The city has also become a hub for the tech industry and was recently named the fastest-growing city in Europe for technology.

With one of our main offices being located in the heart of the city centre, I see Manchester growing and changing every time I visit so I’m personally pleased to see it hit the top spot.

Manchester’s main selling points for private landlords are that it performs well on core factors such as rental returns and long-term house price growth, but more importantly it has one of the biggest rental markets in the UK, with 31% of Manchester’s population being private renters. It also has some of the lowest vacancy rates across any city included in the Tracker. This is combined with above average rental ability (on average £428 per room per month) and security in investment with property prices having increased by 4.1% annually on average in the last decade.

And it looks like Manchester will continue to be a great place for landlords to invest, with the city centre population increasing from 35,000 in 2015 to 60,000 in 2020. By 2025, an extra 100,000 people are expected to be living in the city centre, a place no longer monopolised by students and young professionals but with increasing numbers of 35-49-year-olds choosing to live in apartments too.

Our Buy to Let City Tracker shows that across the UK there is still great short and long-term returns to be had for landlords, with a number of cities providing excellent rental yields with room for capital growth.  There has been a high level of uncertainty for landlords since the Covid-19 outbreak but the changing needs of renters, whether to move to a new location or a different type of property to fit flexible working demands, has created new investment opportunities for landlords.