Property investment, like all types of investment, is not without an element of risk as future property prices can never be accurately forecaster. In theory, it can be likened to attempting to predict the future as market conditions are subject to speculation and investors are dependent on factors beyond their control.
However, when it comes to investing in 2018, the northern powerhouse cities like Manchester are an excellent place to start. Manchester is a city famed for higher than average rental yields, skyrocketing demands and a huge capacity for capital growth.
Capital growth refers to the profit made on an investment measured by the increase in market value over the invested amount or cost price. Without a rise in price, the potential for capital growth diminishes, leaving assured rental yields the only opportunity for rental income.
In a UK property market trends analysis produced by Hometrack, a company who collate house prices trends across 20 of the UK’s largest cities, placed Manchester as the number one hotspot for capital growth on property investments.
Manchester is dubbed the UK’s ‘second city’, a phrase coined due to Manchester’s burgeoning economy, extensive transport links with convenient access to the capital, rich culture and heritage that is forecasted to attract 41.7 million visits in 2018, and a plethora of leading UK institutions housing a record number of students.
Outpacing southern destinations, the northern city of Manchester has a recorded price inflation over the last 12 months as high as 7.5 per cent compared to the capital which only increased by 0.4% over the same period. Evidently, Manchester is leaving London a distant memory and overshadows the capital on the property front.
Data from May this year highlights a steady growth in Manchester’s property market, taking the lead amongst fellow northern hotspots Sheffield and Liverpool. The last three months have witnessed a 2.7% increase in house inflation, and even the past month has seen prices rise by 0.7%.
Oxford and Cambridge associate heavily with the capital city in terms of location and past economic performance, however these southern cities are struggling to keep up with the success from the north as these locations are experiencing the biggest decline in years for price inflation. Oxford has increased by a measly 1.2% in the past year whereas Cambridge has dramatically reduced as the price of inflation has decreased by 0.9%, reflecting the dwindling property market towards the south of the country.
According to Hometrack, the average growth rate for cities across the UK is 4.5%, although Manchester’s immense surge in house prices exceeds this figure proving its position as a major player in property investment, not only surpassing London but most other cities in the UK.
It is important to note that simply targeting a city is not always enough as not all properties are equal just because of their location – not all buys will be good value. Due diligence and market research must play a part in ensuring a lucrative investment opportunity.RW Invest, Liverpool’s leading property investment company strongly recommend investors to invest in a city with monumental regeneration projects underway. Regeneration adds to the cities overwhelming capital growth and improves appeal for tenants from all around the globe.
Manchester presents property gold, price inflation for buy to let investors stimulates future opportunity for capital growth and allows maximum income from investments across the city. Assuring investors with affordable properties and healthy rental yields establishes Manchester as a must have city in every investor’s portfolio, underpinning the success of the city as it reinstates itself as a city hard to rival.