Manchester buy-to-let opportunities

I’ve just returned from a short break in Manchester and it appears that the buy-to-let sector in Manchester is well and truly booming.  There are cranes from Spinningfields adjoining the City Centre to Media City in Salford.  Every where there are signs advertising buy-to-let opportunities.  So are the streets of Manchester paved with buy-to-let gold?

Manchester buy-to-let opportunities

It’s true that Manchester has a young vibrant population with two massive universities and one of the largest student populations in Europe and the relocation of staff from London to the new Media  City means that the place is awash with generation renters.  A recent report highlighted Manchester as top of the buy-to-let league table for rental yields with gross rental yield approaching 8%.  This is partly because of strong rental demand and low house prices averaging just over £100,000.  The percentage of private housing renting in Manchester is higher than the average at 26.85% reflecting the demand from a young footloose population ideal to rent to.  Average rents across the city do vary widely so as always it pays to do your research.  For instance according to latest Valuation Office Agency figures a one bed apartment in the City Centre would go for £600 ppm where as across the City in Salford the same flat would only achieve £495.  In Wigan rents on a 1 bed flat would be as low as £370.
So  its a no brainer... fill your boots with buy-to-let booty!!!

Is buy-to-let in Manchester being investor led?

Just before every landlord goes running to their mortgage broker desperate for some investment cash and looking to bag a brace of buy-to-let in Manchester; just a couple of warning bells from a buy-to-let old timer i.e. me.  My observations from a short visit to some of the buy-to-let hotspots in the City - Media City and New Islington is that there appears to be a great amount of development activity, but it also seems to be investor led.  It reminds me of the days prior to the credit crunch where easy money meant developers went on a building boom knowing that their was an endless supply of gullible investors clammering to buy into the buy-to-let dream.  I’m not saying that this time there is quite that excess or naivety but their are similarities.  So should you avoid investing in Manchester.  Well I’m not saying that either.  The honest truth is I don’t know the local market that well.  However, I suspect that may first time investors are no different to me but are tempted to sign the deposit cheque anyway. 

Manchester buy-to-let investors need to do their research

I’m not saying don’t buy an investment property in Manchester.  However, what I would say is anybody looking to invest in this powerhouse of the North needs to look very carefully at the investment proportion before committing.  Look at the areas, think about the existing competition.  Is the area over supplied?  Talk to local letting agents to get an understanding of the local market.  Essential is to visit the place just to get a feel of the areas before you commit.  So as always caveat emptor before signing on the dotted line and make sure you understand the downside as well as the potential upside risks of investing in what is a undoubtedly vibrant city that is on the up.

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