All aboard the Manchester buy-to-let train
By Molo Finance
Manchester has proven to be a profitable area for buy-to-let investors valuing high yields and reasonable house prices. We covered some of the reasons behind the city’s popularity in a previous post about the Manchester buy-to-let scene, and now we are looking at specific areas in the city that are buy-to-let hotspots.
Each one of these neighbourhoods has helped Manchester become one of the most appealing cities for buy-to-let investment in the UK. Investors can expect strong yields of around 5.8 per cent as well as an overall strong growth in rental prices.
So, without further ado, here are the areas in Manchester that are worth your attention. We have calculated the the yields for the most popular property type in the area and the overall yields for all property types combined.
Manchester City Centre
Manchester City Centre offers yields at the lower end of the scale when compared to other local areas. However, it’s still a favourite for buy-to-let properties, especially for those who are investing from outside of the city. The continuous building of new homes to keep up with demand highlights the city centre’s popularity..
With a location that sits on the doorstep of all the major working hubs — including the BBC — not to mention excellent travel connections and all the amenities you would expect from a major city centre, it’s not hard to see why such a central location would prove to be so sought after.
A one-bedroom apartment in the centre — one of the most popular rental property types — will cost you between £130,000 and £200,000, with an expected monthly rental of around £700 per month at the lower end of the scale and just over £1,000 at the higher end. Expect yields of about 6.5 per cent for a one-bed.
Overall for all property types combined: 3.8%
Average rental for all properties combined: £1,076
Average price for all properties combined: £339,553
An inner-city suburb of Salford, Pendleton comes under the M6 postcode in Manchester. It is one of the more densely populated areas of the city and is considered one of the key regeneration areas.
Excellent travel links into the city of Manchester and nearby cities such as Liverpool makes Pendleton appealing to commuters. It also offers an alternative to the higher rental prices found in the city centre.
Houses are the most popular property types in Pendleton: a two-bedroom property averages around £129,500. Investors targeting this area can expect to earn around £720 per month for a two-bedroom house and enjoy yields of 6.6 per cent.
Overall for all property types combined: 6.6%
Average rental for all properties combined: £942
Average price for all properties combined: £170,833
With Manchester’s main university campus nearby, it’s not hard to see why Fallowfield is a rental hotspot. The beginning of December sees first-year students clamour to find housing, which marks January to April as the busiest times in the market.
Other than students, there is a clutch of families renting in the area — the excellent schools are one of the main reasons behind families living in Fallowfield. This suburb of Manchester is also known to have the busiest bus route in Europe, which means that residents are well connected.
Three-bedroom properties — ideal for families or student sharers — market for around £209,000 and achieve a monthly rental in the region of £1,050. Landlords can expect to see yields of about 5.9 per cent for three-bed properties.
Overall for all property types combined: 9.6%
Average rental for all properties combined: £1,705
Average price for all properties combined: £211,303
Located close to the city centre, Castleford offers an eclectic mix of old and new and has a distinct level of charm that makes it popular with creatives. Features include plenty of cobbled pavements, quaint waterways and even a Roman Fort.
New developments and conversations make up most of the properties in Castleford, and construction is continuous so that it keeps up with demand. Many buy-to-let investors are attracted to the area because of its proximity to the city centre.
Castleford is one of the most expensive parts of Manchester, with one-bedroom properties averaging £178,180. However, landlords can expect a healthy return on monthly rentals: a one-bedroom flat fetches in the region of £1,150 per month, which offers yields of 7.7 per cent.
Overall for all property types combined: 5.4%
Average rental for all properties combined: £1,286
Average price for all properties combined: £282,698
Many see Hulme as one of Manchester’s greatest successes. What was once a crime-ridden area is now home to brand new housing and plush developments. Such a turnaround has made it sought after with buy-to-let investors.
Hulme Park and Alexander Park offer tranquil open spaces, though the area is not shop and restaurant-heavy. However, with Deansgate only 10 minutes away, there are plenty of shops, bars and restaurants within easy reach.
Flats are the most popular property type in Hulme, with a one-bedroom apartment listing on the market for around £178,720. Monthly rentals for this type of property achieve in the region of £750 per month, which provides a yield of around five per cent.
Overall for all property types combined: 5.8%
Average rental for all properties combined: £1,065
Average price for all properties combined: £219,875
One of the most in-demand areas in Manchester, Didsbury offers tree-lined residential streets and many period homes. It is made up of three distinct areas: East Didsbury, known for its excellent schools; West Didsbury, which is known for its high-quality restaurants; and Didsbury Village, which is the most in-demand part of the M20 postcode.
Families tend to lay down roots in Didsbury, which means those choosing to rent will most likely lean towards long-term contracts that offer extra security. As well as a plethora of good schools, there are also many open spaces and an active community presence.
Didsbury is at the higher end of the price scale in Manchester, and three-bedroom homes are the most in demand. Expect to pay an average of £362,730 for a three-bedroom house and receive around £1,100 in rental income. Yields are around 3.6 per cent.
Overall for all property types combined: 4.8%
Average rental for all properties combined: £1,541
Average price for all properties combined: £378,153
All aboard the buy-to-let train
If you’re thinking of making Manchester your next area of investment and need a buy-to-let mortgage,, why not get a decision within minutes online? No paperwork. No fuss. Just competitive purchase and remortgage buy-to-let products, from the UK’s first, and newly launched, digital mortgage lender.
Property value and rental yields from home.co.uk in November 2018. All calculations factor in all property types and number of bedrooms.