Manchester is one of the top 10 places in the UK for rental growth according to the latest buy-to-let data. If you’re thinking of buying a rental property in the city, which postcodes are the most promising?
Manchester is the jewel in the crown of the much-touted ‘northern powerhouse’, so it’s receiving plenty of infrastructure investment and a lot of attention. If, like the majority of buy-to-let landlords, rental yield is your focus when you’re considering where to invest, it’s worth giving the city some serious thought.
Best areas for buy-to-let in Manchester
South of the city centre, the M14 postcode includes places like Fallowfield, Rusholme and Moss Side. The main University of Manchester campus is close by, so this is the most popular part of the city for student rental – about 30 per cent of the population are full-time students.
Moss Side was once notorious for riots and gang violence, but it’s received lots of investment that’s helped to turn it around. Buses into the city centre take only ten minutes, and there’s a good cycle network too.
This postcode is a top pick amongst buy-to-let investors, who are currently seeing average rental yields of over 8 per cent according to the latest buy-to-let hotspots map from TotallyMoney.com.
North west of the city centre, the M38 postcode includes Little Hulton, where property prices are very reasonable: you can buy a terraced house for as little as £70,000, and the median asking price for properties is just over £90,000.
It’s far from the smartest part of town and its reputation isn’t the best, but it qualifies as a Manchester buy-to-let hotspot as landlords are enjoying average rental yields of almost 7 per cent.
The M6 postcode includes Pendleton, Claremont and Langworthy, as well as part of Salford. It’s not far from the centre of Manchester, and the University of Salford is close by, so it’s a popular area for students.
The data shows that this postcode currently boasts the best rental yields in Manchester, with average yields nearing 9 per cent.
Right next to M6, the M5 area of Manchester is another top pick for buy-to-let investors, with buy-to-let yields averaging almost 8 per cent.
Again, it’s a popular student area, and its proximity to both Manchester city centre and Salford makes it popular with professionals too.
The area also includes the Ordsall estate. Once a council estate known for violence and rioting, the estate has just undergone a £100 million transformation to create a complex of modern townhouses and apartments.
What should you look for in a Manchester buy-to-let investment?
Good transport connections are key, both for attracting tenants and for when you come to resell the property. Data from Nationwide in 2015 showed that buyers in Manchester were prepared to pay 4.6 per cent more on average for a home within 500 metres of a tram stop.
Also keep in mind university locations and popular student areas, as student rental can bring particularly good rental yields.
Finally, look out for areas that are up-and-coming and where there’s investment, but be a bit wary of an area if there’s lots of new housing going up. This could lead to oversupply, which may cause rental returns to plummet.