In a remarkable shift in the UK's property investment landscape, Manchester has surpassed London to become the most attractive city for property investment in England. The latest UK residential investment cities report by Colliers for the first half of 2024 has catapulted Manchester to third place in the national rankings, cementing its position as England's top destination for property investors.
This ascent is no surprise to those who have been closely watching Manchester's trajectory. The city has been steadily building its reputation as a powerhouse of the North, with a thriving economy, burgeoning job market, and an ever-growing population of young professionals and students.
Manchester's appeal lies in its unique blend of affordability and potential for high returns. While London's property market has long been synonymous with sky-high prices and diminishing yields, Manchester offers a refreshing alternative. The average property price in Manchester, standing at £244,594 as of February 2024, is significantly lower than London's eye-watering £502,690. This accessibility, coupled with impressive growth projections, makes Manchester an irresistible proposition for overseas investors looking to enter the UK market.
The city's economic outlook is equally compelling. Manchester's economy is expected to grow at an annual average rate of 2.5% between 2024 and 2026, outpacing the national growth rate of 2.1%. This economic vitality is underpinned by a diverse range of industries, from digital and creative sectors to finance and advanced manufacturing. The presence of global giants like Amazon, Google, and Microsoft, alongside a vibrant startup ecosystem, ensures a steady influx of talent and job opportunities.
For investors, the numbers speak volumes. JLL predicts that Manchester will experience the strongest house price growth of any UK city in 2024, with an estimated increase of 2.5%. This growth is set against a backdrop of rising demand and limited supply. The city centre population is expected to reach 100,000 by 2026, while employment figures are projected to hit 315,000 by 2040. Yet, new home completions are struggling to keep pace, with only 2,402 new homes delivered in 2023.
This supply-demand imbalance is creating a perfect storm for rental yields. Manchester consistently delivers rental yields of 6-7%, outperforming the UK average of 5.60%. With JLL forecasting average annual rental growth of 2.6% until 2026, the potential for strong returns is clear.
The city's commitment to regeneration and development further bolsters its investment credentials. Projects like NOMA and ongoing improvements to transport infrastructure are enhancing Manchester's appeal and liveability. The £1 billion transformation of Manchester Airport and the creation of 20,000 jobs at Atom Valley are just two examples of the city's ambitious plans for growth.
For overseas investors, Manchester offers a compelling package: affordable entry prices, strong capital appreciation potential, attractive rental yields, and a robust, diversified economy. As the city continues to outperform expectations and climb investment rankings, it's clear that Manchester is not just competing with London – it's carving out its own distinct identity as England's premier property investment destination.
In a market where timing is everything, the message is clear: Manchester's moment is now. As the city continues its upward trajectory, savvy investors would do well to stake their claim in this northern powerhouse before prices catch up with its potential.
