Some of the key headlines about Manchester is that it enjoys some of the highest rental yields in the country with yields consistently over 6%, jobs are being created faster in Manchester than any other UK city, including London and employment growth in the city continues to outstrip other cities in the UK.
Interestingly, more professional service jobs have been created in the North west than in London over the last year, and this has seen significant growth in the young professional market with 60% more 25 to 29-year olds living in the city than the rest of the UK.
The sheer number of 20 to 30-year olds that have moved to the city has soared over the last decade and this is the demographic that is seen as the prime opportunity for buy-to-let.
So what’s been attracting this age group to the city?
Quite simply, it’s the diverse range of jobs across a wide range of different sectors that continues to draw young professionals in. Over the last few years Manchester has seen considerable job growth in law, management consultancy, finance, digital marketing and media. This has also tempted a large proportion of Manchester’s huge student population to stay in the city after graduation (Manchester’s graduation retention rate is currently at 58%).
In addition, Manchester has also seen an influx of companies moving to the city from London because of the cheaper cost of living, staff costs, and ready supply of skilled workers. BBC and ITV Granada are good examples of this, both of which have moved large parts of their operation to Media City UK in Salford, Manchester. It has been estimated that companies can save around £20K a person per annum by relocating from London to Manchester and this has proved to be a powerful catalyst for companies to relocate.
Population could potentially double
Many of the young professionals that live and work in Manchester choose to rent rather than buy because this fits in more with their lifestyle. If the Northern Powerhouse initiative delivers to expectations, then this could potentially see the number of people who live within an hour of Manchester double by 2025. This would take the population from 7 million today to 15 million largely as a result of the improved road and rail links and the numerous job opportunities that this will open up in the city.
If this materialises then the potential rental market in Manchester will grow dramatically and the capacity for greater yields will increase further still.