Key Survey
- Manchester’s vibrant rental market, strong economy, and high student population make it a desirable location for landlords.
- Landlords in Manchester must understand the UK’s rental laws, maintain their properties effectively, and choose tenants wisely.
- Manchester boasts high rental yields, increasing property values, and excellent travel links, benefiting landlords significantly.
- Landlords should avoid complacency in property maintenance, ensure positive tenant relationships, and be cautious about property location.
- Despite landlord responsibilities and costs, Manchester’s thriving rental market makes it worthwhile to invest in rental properties in the city.
What is Property Maintenance
In 2018, Manchester was billed the best place to be a landlord in the UK, and with an average rental yield of 5.17% in 2023, it sits higher than many other popular rental cities including Sheffield, Nottingham, and nearby Newcastle.
With rental yields as high as 8% in Greater Manchester, it is clear that the city offers a thriving, dynamic market that is ideal for those looking to make a property investment. The city’s rich amalgamation of cultural vibrancy, robust economy, world-class universities, and extensive regeneration projects have collectively fuelled a steady demand for rental properties.
With an ever growing population, thanks to an influx of young professionals, international students, and families seeking quality rental accommodation, there is a steady stream of tenants that provides landlords with a stable, steady stream of potential tenants.
The city’s rental market combined with Manchester’s economic growth creates a thriving hub of people looking for somewhere to live. From high-end luxury apartments that appeal to successful professionals, to more affordable student accommodation, the broad spectrum of rental opportunities in Manchester strengthens its position as a desirable location for landlords and shows that becoming one is definitely worth it!
Key Reasons to Become a Manchester Landlord
High Rental Demand
Manchester’s continuously rising population and the presence of numerous international businesses have triggered a substantial demand for rental properties. As a result, landlords can benefit from a lower risk of void periods.
Not only does the city offer a multitude of employment opportunities, but it also presents a cosmopolitan lifestyle that attracts people from various walks of life. As these residents seek rental accommodations that align with their work and lifestyle preferences, the opportunity for landlords remains robust. Moreover, the city’s rich educational landscape contributes significantly to its high rental demand.
Large Student Population
One of the standout features of Manchester’s rental market is its vast student population. With an impressive 120,670 students in the academic year 21/22, the demand for student accommodation is consistently high. This scenario presents landlords with a fantastic opportunity to tap into the student rental market, which is often associated with high yields.
Being a university city, Manchester has a significant turnover of students each year, ensuring that the demand for student properties remains steady. Moreover, with students generally seeking accommodation on an annual cycle, landlords can anticipate and prepare for changeovers, making planning and property management more straightforward.
Rising Economy
The city’s economy plays a vital role in shaping its property market. As of August 2022, Manchester had recorded its highest employment rate, with a whopping 243,549 individuals in jobs. This rise in employment figures corresponds to an increased ability for residents to rent, making the city an attractive prospect for potential landlords.
Furthermore, Manchester is home to some of the UK’s fastest-growing industries, including digital and creative sectors. Such economic growth creates a steady flow of young professionals moving to the city, contributing to the high demand for rental properties. Consequently, landlords can take advantage of this economic upswing by providing high-quality rental options targeted towards these professionals.
High Rental Yields
Manchester is renowned for its attractive rental yields, particularly in postcodes such as M4 and M11, where landlords can enjoy returns as high as 8%. These impressive yields reflect the healthy balance between property prices and rental rates in the city, an equation that works favourably for landlords.
The city also witnessed a significant increase of 19.3% in asking rents in 2022. Combined with the average property sold price in the last 12 months being £250,982, this scenario translates into robust returns for landlords. It is worth noting that rental yields in Manchester often outperform many other locations in the UK, reaffirming the city’s reputation as an attractive location for property investment.
| Postcode | Average Rental Yield (%) |
|---|---|
| M1 | 6.19% |
| M2 | 5.86% |
| M3 | 6.79% |
| M4 | 5.81% |
| M11 | 7.36% |
Increasing Property Values
The long-term financial success of landlords is not solely determined by rental income; capital appreciation plays an equally crucial role. Manchester’s property values have witnessed an upward trajectory, buoyed in part by the city council’s ambitious plan to build 36,000 more homes over the next decade.
This commitment to developing the city’s housing stock is a clear indication of Manchester’s growth and development. It promises potential for capital appreciation, enabling landlords to benefit not just from regular rental income but also from the increased value of their property assets over time.
Excellent Travel Links
Connectivity plays a pivotal role in a city’s property market, and Manchester shines in this regard. With the forthcoming Northern Powerhouse Rail project and the significant expansion of Manchester Airport, the city’s travel links are set to improve substantially and in turn, will have significant economic impact.
Improved connectivity often translates into an increased property demand which enhances rental rates and property values. It also stimulates economic growth as more job opportunities are created and more professionals are attracted to the city, further boosting the rental market.
Oxford Economics’ research shows that decreased journey times due to improved rail speeds are set to boost individual wages by as much as £600, meaning prospective tenants have more income for rental properties.
Strong Leisure and Shopping Activities on Offer
Manchester’s vibrant lifestyle adds another dimension to its appeal as a location for landlords. Home to the UK’s largest inner-city shopping centre, Manchester Arndale, the city offers a fantastic shopping scene that attracts a wide range of tenants.
However, shopping is just one aspect of Manchester’s leisure offerings. With a rich cultural scene, including theatres, art galleries, and music venues, the city attracts a diverse crowd. This diversity enhances the appeal of becoming a landlord in Manchester, offering a wide array of prospective tenants and property types to cater to their varied preferences.
What to Avoid as a Landlord in Manchester
Being a landlord in Manchester can be highly rewarding, but it requires a strategic approach. Here is a few things to steer clear of in your role as a landlord in Manchester:
Neglecting Maintenance
One of the primary pitfalls to avoid is complacency regarding property maintenance. Rental properties are long-term investments that require consistent upkeep to retain their value and appeal to tenants.
Regular maintenance not only ensures the property’s longevity but also helps avoid significant repair costs that can arise from neglect over time.
Poor Communication
In addition to maintaining the physical state of the property, landlords should also be attentive to tenant relationships.
Communication is a key aspect of successful tenancy; neglecting tenant concerns or failing to address issues promptly can lead to tenant dissatisfaction and high turnover rates.
Bad Locations
Choosing the right location for property investment is another critical aspect. Not all areas in Manchester offer the same profitability. Whilst Manchester offers some great rental opportunities, there are areas, such as Ashton Moss, Cheetham Hill, and Hulme, that might not yield as high returns.
Factors such as high crime rates, poor transport links, or lower rental demand can reduce rental profits. We would highly recommend researching thoroughly into demographics, rental demand, and development plans before committing to an area.
Frequently Asked Questions
How Much Do Landlords Make in the UK?
The amount landlords make in the UK will vary significantly depending on the property location and type. In a city like Manchester, however, with high rental demand and yields, and an average rental price of £1,104 in the city centre in 2023, landlords can expect attractive returns.
What Are the Costs of Being a Landlord in the UK?
Costs can include property purchase and maintenance, landlord insurance, letting agent fees, and taxes, among others, however, these costs can be offset by rental income and potential capital appreciation.
Are Landlords Selling Up in 2023?
While some landlords may be choosing to sell as a result of the cost of living crisis, many are holding onto their properties, especially in thriving rental markets like Manchester. The decision to sell or hold largely depends on individual circumstances and market conditions.
Conclusion
Considering the thriving rental market, rising economy, high rental yields, increasing property values, large student population, excellent travel links, and diverse leisure and shopping offerings, it’s clear that it is worth being a landlord in Manchester.
Remember to gain an understanding of your responsibilities, as well as the costs, associated with being a landlord. If you require help in managing your rental property, contact MMC Management to learn how we can help.
