Manchester property values and yields
The strong current performance of property in Manchester has allowed the market to blossom into a richly varied entity.
In recent years, the practice from investors was to buy prime central apartments and off-plan residences to benefit from capital gains alone. However, the market is now so strong across the board it has witnessed a rare phenomenon where capital values and rental yields have climbed at a similar pace, meaning holding onto assets over a longer-term offers investors a significantly higher return on investment.
RISING RENTAL VALUES
One of the most notable takeaways from JLL’s 2020 Northern England Forecasts is that Manchester property investments will see both sales price growth and rental yield growth climb at a markedly similar rate over the next five years. Investors entering the market with a long-term view will benefit from rising values and rent. When compared to the wider region and the national average, Manchester continues to set itself apart from the UK’s property market.
SALES PRICE GROWTH FORECAST (CUMULATIVE, NEXT 5 YEARS)
RENTAL GROWTH FORECAST (CUMULATIVE, NEXT 5 YEARS)
Source: JLL 2020 Northern England Forecasts.
What’s more, despite the challenges caused by the pandemic, the cost of rental property in Manchester increased by 1.4% in the last three months alone (Zoopla).
With a resurgence in demand following cities opening back up, university students starting a new academic year, and offices and businesses opening up across the city, there is plenty of scope for rental values to climb at a faster pace in 2022.
RISING PROPERTY VALUES
For many years, Manchester has been regarded as one of the UK’s best performing property markets and has emerged as a safe choice for those looking to achieve capital gains.
The value of property in the City is expected to climb rapidly over the next five years due to heightened demand and the availability of higher-quality stock. Most UK cities have been unable to keep up the pace in terms of both capital growth and potential for the future, which presents a range of advantages for investors.
Average property values have climbed by almost 50% over the last 10 years and with prices in the city set to rise by 17.1% (5-year cumulative), there remains plenty of room for growth.
The question is now how to find the best value on the market to secure the highest return on investment.