The UK’s buy-to-let sector has faced a growing number of headwinds in the last year, following a raft of government measures and tax changes. While cities such as London have lost their rental spark, new research confirms Manchester is the best place to be for investors looking to beat the buy-to-let blues.
One of the UK’s largest cities, Manchester is at the heart of the country’s Northern Powerhouse and its infrastructure, culture and economy are all enjoying growth. Developments such as MediaCity UK have helped to turn it into a hub for workers, particularly among younger professionals, reversing the traditional “brain drain” that saw people move to London away from such regional cities. Indeed, Manchester’s population is expected to rise from its current level of approximately 520,000 to 600,000 by 2030.
As a result, the city’s buy-to-let market is booming. According to the latest report by LendInvest, Manchester has the fastest rental growth in the UK, with rental prices rising 7.53 per cent in the last year. It is also ranked number one for rental yields in the UK, with average returns of 6.11 per cent.
As mortgage interest tax relief is phased out, and letting agent fees are passed from tenants to landlords, some buy-to-let investors are considering selling up or incorporating. For those still banking on bricks and mortar, the most popular solution is to go back to basics to offset these new costs, focusing on markets that provide the best possible returns for the lowest possible outgoings.
Capital growth is an important long-term factor for investors seeking the most reliable returns and the UK’s regional cities, particularly those in the Northern Powerhouse, are leading the way. Manchester is enjoying the second fastest price growth in the country, with property values up 7.1 per cent in the last year, according to Hometrack. Nonetheless, prices remain far below that of London, with an average of £157,500, compared to the capital’s £494,200. As a result, the city is among the top 10 buy-to-let hotspots in the country, according to LendInvest.
The result is a market that has become increasingly sought-after among investors as well as tenants. Interest in Manchester property on TheMoveChannel.com surged 122 per cent year-on-year in Q1 2017. As more landlords react to the changing tax rules, that demand is only expected to climb.
“DeTrafford is contributing significantly to this Powerhouse property boom, offering innovative, high quality luxury apartments and townhouses in the City centre and surrounding Manchester area,” says DeTrafford Sales Manager Owen McArthur.
“Combining contemporary design, suburban luxuries and usable roof top and communal spaces, the schemes truly provide an unparallelled offering to investors and tenants alike.”
1. City Gardens
Returns 6% NET rental guarantee for 2 years
86 apartments brilliantly located to take advantage of prime transport links, with positive cash flow of £312 PCM after costs. All of these attractive features make this opportunity one that is sure to be in high-demand and highly lucrative to investors.