Manchester is an extremely popular city for landlords looking for buy to let property. A rising and diverse population, improving connectivity and plenty of job opportunities make it an intriguing choice.
But which areas in Manchester are best for rental opportunities and where should landlords look to expand their property portfolios? Read on for The Landlord Link’s guide to buy to let in Manchester.
Why buy a rental property in Manchester?
Manchester has always been at the forefront of innovation. From cotton mills in the 1800s to today’s vibrant technology and media scene, it’s a city for up-to-the-minute optimists. Manchester is second only to London in terms of technology investment and has ambitions to be a world-class city within the next five years.
The population of Manchester is growing too; 2.7 million people live in the Greater Manchester area, with the population in Manchester itself expected to rise to over 530,000 by 2025.
Manchester residents benefit from superb shopping, restaurants, nightlife and cultural opportunities, as well as connections to the rest of the UK. Manchester Airport is the busiest airport outside London with connections across the globe.
Like any large city, the population in Greater Manchester is extremely diverse. Manchester has more multi-millionaires than any other UK city apart from London; on the other hand a 2010 study found that the Manchester City Council area was the 4th most deprived local authority in England.
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The housing stock in Greater Manchester (which includes areas like Salford, Stockport, Oldham, Wigan, Bolton and Rochdale) is as varied as the population.
The best areas for buy to let in Manchester
Property investors in the Manchester area have a great range of areas and housing types to choose from. Which area in Manchester will you choose for your next buy to let investment?
Manchester City Centre
Manchester has seen a huge city-centre living boom over the last 20 years, starting in the converted warehouses of the Northern Quarter and spreading across the city centre. Shiny new apartment blocks seem to rise up on an almost-weekly basis, and there’s historically been no shortage of professional singles and couples to live in them.
2020 has changed this a little, and letting agencies in Manchester report that they’ve seen an increase in city-centre renters looking to move out of apartments in favour of larger properties with some outside space in areas like Chorlton and Didsbury. As a consequence, there’s a slight oversupply in apartments at the top end of the market, with Manchester landlords having to realign their rental expectations.
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It’s not all bad news for Manchester city centre landlords. The same landlords reporting declines at the upper end have also seen an encouraging trend for people who live just outside Manchester city centre looking for homes where they don’t need to commute to their central jobs by public transport. Agents also believe that the upper end will bounce back, so now could be the time to pick up a bargain for the longer term.
Landlords looking for buy to let properties in Manchester city centre to add to their portfolio should choose carefully; apartments should be large enough to accommodate working from home, and any outside space is a huge bonus.
Wythenshawe
Wythenshawe is in the south of Manchester, near Manchester Airport. The Metrolink tram arrived in Wythenshawe in 2014 and since then interest in the area has grown. Employment opportunities are increasing, an injection of funding has improved facilities and schools, and the Airport City development should make the area more and more attractive.
Wythenshawe was at one time the largest council estate in Europe and most of the housing is social housing built between the 1920s and 1960s, with pockets of newer houses. Yields of around 7% are still possible in Wythenshawe, while rising property prices in this part of Manchester make it a good area to look at if you want a combination of solid yields for the short term and long term appreciation.
M14 – Rusholme and Fallowfield
The M14 area of Manchester has been pinpointed as one of the best areas for buy to let in 2020. Average property prices in the region of £170,000 and potential rental yields of 7.6% certainly look very attractive to Manchester buy to let investors.
Both Rusholme and Fallowfield are popular areas with students at the University of Manchester and Manchester Metropolitan University. There are a number of student halls in the area and students who choose not to stay in halls often choose the terraced houses of Rusholme and Fallowfield. Fallowfield housing attracts a premium and HMOs in Fallowfield tend to be of better quality.
Between 2012-13 to 2017-18 the student population of Manchester grew by around 7%, but purpose-built student accommodation grew too. At the moment Manchester doesn’t have the student house oversupply issue that we’ve seen in Liverpool, but it may not be far away. If you’re interested in buying an HMO in Manchester we recommend looking carefully at how convenient the property will be for tenants, and how the quality of what you’re planning to offer compares to others in the market.
Property investors in Manchester should also be aware that like Birmingham, there’s an Article 4 direction requiring planning permission for all new HMOs across the entire Manchester City Council area. There are also Article 4 directions on changing the use of office or light industrial facilities to residential in several areas. As always, do your research before buying a property to rent out in Manchester.
Levenshulme
In 2019 The Sunday Times named Levenshulme one of the best places to live in the UK. The judges liked up-and-coming Levy’s food scene and community feel, and if you add in easy connections to Manchester City Centre, it’s pretty clear to see why everyone loves Levenshulme.
Professional tenants who’ve been priced out of Chorlton or Didsbury are choosing Levenshulme instead, and the area has seen a 22% increase in house prices since 2017. That growth has eaten into prospective yields somewhat, but the increasing popularity of the area means that careful investors could achieve 5-6%.
Droylsden
Out to the east of Manchester, in the Tameside council area, you’ll find Droylsden. This part of Manchester was built up in earnest in the 1930s, so much of the housing stock in this area is 1930s semis, making Droylsden particularly suitable for families.
Droylsden has a large Tesco supermarket and local shops, while the Metrolink tram runs through the middle of the area, connecting Droylsden to the city centre and Media City in Salford. It’s a popular and stable rental area, growing in popularity for its convenience.
Landlords looking to add a buy to let property in Droylsden to their portfolio could be looking at yields of close to 6%. For a cheaper initial outlay but similar yields, take a look at nearby Ashton-under-Lyne, which is particularly well served by public transport with Metrolink, a train station and a brand new bus station.
Which of these areas in Manchester would you choose for your next buy to let investment?