Delve into an exclusive Q&A session with Rothmore Property, shedding light on Manchester’s dynamic property market. Uncover key insights, from investment catalysts to burgeoning trends, as Manchester maintains its allure for discerning investors seeking stability and growth.
Can you tell us about your experience and background in the Manchester property market?
How long have you been operating in the Manchester property market?
Rothmore Property has been a prominent player in the Manchester property market for the past five years, since April 2019.
What motivated you to specialise in this region?
Manchester’s status as a property investment hotspot within the UK, coupled with its pivotal role in the Northern Powerhouse initiative, motivated us to specialise in this thriving property market. The city offers a compelling blend of high-yielding investment opportunities, robust economic growth, and renowned developers. From its industrial heritage to world-class football clubs, Manchester embodies resilience, innovation, and continuous growth—essential pillars for any discerning property investor.
What are some notable achievements or successes you’ve had in the Manchester property market?
Rothmore Property takes pride in our contributions to the Manchester property market. We’ve collaborated directly with the three largest developers in the city. We’re actively involved in 11 prominent Manchester projects. Our collective efforts have led to Gross Development Value (GDV) sales totalling approximately £100 million during our involvement and tenure, including remarkable sales figures exceeding £12 million on individual developments. Moreover, we’re presently engaged in 20 projects across the UK.
What makes Manchester an attractive investment destination in your opinion?
Can you highlight some key factors driving investment in Manchester’s property market?
Local Economy
Manchester’s allure as an investment hub stems from its remarkable economic ascent. Between 2011 and 2021, the city’s GDP per capita surged by 44%, outpacing even London, and hitting £51,330—indicating robust growth and solidifying its status as a regional powerhouse. This growth is fuelled by factors like population expansion, job creation, and major infrastructure projects such as MediaCityUK and Enterprise City. Moreover, Manchester’s excellent connectivity, high graduate retention, and global reputation bolster its appeal to investors seeking stability and long-term growth.
Regeneration
On the back of such positive economic growth, the property market has followed suit in a direct correlation. Ongoing regeneration initiatives in areas like the Northern Quarter, Ancoats, and Salford Quays have revitalised former industrial areas, transforming them into vibrant residential, commercial, and leisure districts. These developments offer opportunities for investors to capitalise on growing property values and rental yields.
Infrastructure Investment
Significant investments in infrastructure, including transportation networks like the Metrolink tram system and major road improvements, have enhanced connectivity within the city and its surrounding areas. Projects such as the Northern Powerhouse Rail and Manchester Airport expansion further bolster the city’s appeal to investors.
Education
Manchester is home to several prestigious universities and research institutions, attracting a large student population. This demographic contributes to the demand for student accommodation and residential properties, making Manchester a lucrative market for property investors. Manchester boasts one of the highest graduate retention rates in the UK, contributing heavily to rental demand.
Barriers to Entry & Affordability
Compared to property markets in London and other major UK cities, Manchester offers relatively affordable investment opportunities with favourable rental yields. This affordability, coupled with the city’s growth prospects, attracts domestic and international investors seeking value and returns.
Rental Market
Manchester’s rental market is buoyant, fuelled by a growing population, a thriving job market, and a high proportion of young professionals and students. Investors can benefit from steady rental income and potential capital appreciation in this dynamic market.
What specific characteristics of Manchester differentiate it from other property markets?
Manchester’s distinct characteristics set it apart as a premier property market within the UK. The city boasts unparalleled connectivity, earning it the title of the UK’s best-connected city for transport and communications. Its thriving economy, anchored by diverse sectors such as digital media, life sciences, and retail, fuels robust rental demand from young professionals and graduates. Furthermore, Manchester’s cultural prominence, highlighted by globally renowned football clubs and iconic landmarks, sets it apart from other property markets.
Are there any emerging trends or developments in Manchester that investors should be aware of?
Significant regeneration and development projects spearheaded by key developers in Manchester are great pillars of the cities continued growth. Renowned developers such as Renaker, FEC, and Salboy are playing pivotal roles in revitalising key areas like Great Jackson, Victoria North, and Salford. These projects not only enhance the city’s infrastructure but also present lucrative investment opportunities for the residential property market. Staying informed about these emerging trends can help investors capitalise on the city’s evolving property landscape.
How do you assess the current state of the Manchester property market?
What are the current market conditions like in terms of supply, demand, and pricing?
The current state of the Manchester property market is characterised by robust demand, limited supply, and upward pressure on prices. Despite significant development activity, the city continues to face supply constraints, particularly in high-demand areas.
This imbalance between supply and demand has fuelled rental price surges and led to steady growth in property prices across the city. However, challenges such as affordability concerns and competition among investors underscore the need for careful market analysis and strategic investment decisions, it is always best to consult a financial advisor when making any decisions of this nature or size.
Are there any challenges or opportunities investors should be mindful of?
Property buyers can typically face both challenges and opportunities in the Manchester market. Challenges include rising property prices, affordability constraints, and increased competition among other buy-to-let investors. However, opportunities abound, driven by Manchester’s robust economic growth, ongoing regeneration projects, and strong rental yields.
Focusing on areas with significant regeneration potential, diversifying investment portfolios, and staying abreast of market trends have helped buyers previously capitalise on opportunities while mitigating risks. The property market does fluctuate, so there is a chance that property and rental prices fall as well as rise. Which is why it’s always best to consult a finance advisor, who can help ensure personal viability and advice with any purchase being considered.
How has the market evolved over the past few years, and what do you anticipate for its future trajectory?
Over the past few years, the Manchester property market has witnessed significant evolution, characterized by extensive urban regeneration and rising buyer interest. Areas like Ancoats, Salford Quays, and the Northern Quarter have undergone revitalisation, attracting both developers and investors alike, forging new neighborhoods and communities.
Looking ahead, many large UK-based forecast companies and big market players such as Savills and Knight-Frank paint a picture of growth fuelled by foreign investment, infrastructure enhancements, and population migration. Bringing increases in property prices and rental demand. Manchester’s trajectory as a leading property investment destination remains promising, offering ample opportunities for savvy buyers.
What types of properties are particularly popular or promising in Manchester right now?
Can you identify any specific property types or sectors that are performing well?
The residential market, particularly new-build apartments in central locations, remains popular and promising in Manchester. One-bedroom apartments in the city centre, in particular, garner significant interest due to their high rental demand and historically strong capital growth prospects. Additionally, areas undergoing regeneration, such as Great Jackson and Victoria North, present potential lucrative opportunities. It’s always best to do research, keep a keen eye on emerging areas and developments to capitalise on the city’s evolving property landscape.
Are there any emerging niches or segments within the market that investors might overlook?
One emerging niche within the Manchester property market that investors might overlook is sustainable development. With a growing emphasis on environmental responsibility, properties that prioritise sustainability could offer unique investment opportunities.
These properties not only appeal to environmentally conscious tenants but also benefit from potential long-term cost savings and increased demand. Additionally, mixed-use developments that combine residential and recreational elements like addition amenities such as a concierge, gym, garden, or even a swimming pool, tend to demand much higher rents. These can sometimes be overlooked as they do often carry a higher purchase price.
How do you evaluate the potential for growth or return on investment in different property types?
Evaluating the potential for growth or return on investment in different property types involves comprehensive market analysis and due diligence. Typically, historic market trends and current comparable property data, along with IFA forecasts, can offer a good insight into what projected growth in property prices and rental yields may look like.
Location dynamics and regeneration plans over the medium to long term can also help. When it comes to choosing a specific development, key considerations include the track record of developers, location, price, leases, proximity to transportation hubs, and local infrastructure.
How do you approach due diligence and risk assessment when advising clients on Manchester property investments?
We don’t advise clients; we simply provide excellent top-level developments in key areas of Manchester alongside published market data and comparable local properties. We have a thorough due diligence process we go through before taking on any site directly, we consider the developer track record and security measures of developers, lease terms, location dynamics, and deliverability.
Mitigating potential risks associated with off-plan purchases, for instance, involves scrutinizing developer credentials and project timelines. By conducting thorough due diligence and risk assessments, we can sell our sites with confidence.
How do you mitigate potential risks associated with investing in the Manchester property market?
Mitigating potential risks associated with Manchester property investments requires a proactive and strategic approach. Staying ahead of regulatory changes, such as energy efficiency laws and government regulations, ensures compliance and minimizes liabilities.
Are there any regulatory or compliance considerations investors should be aware of?
It is always best to consult a financial and tax advisor when it comes to anything regulatory, as the market conditions can fluctuate and change, being well informed about compliance and regulatory changes could be difference between a successful or unsuccessful venture.
Key considerations may include upcoming energy efficiency laws requiring properties to meet an EPC rating of C or above by 2028. Stamp duty implications on second properties and ongoing changes to rental legislation necessitate thorough due diligence and legal advice.
Staying informed about regulatory updates and seeking professional guidance through an IFA can help investors navigate compliance requirements and mitigate regulatory risks effectively.
Can you share some insights on the rental market in Manchester?
What is the current rental demand like, and how does it impact investment decisions?
The rental market in Manchester is robust, driven by high demand and limited supply. This demand is particularly pronounced in central areas such as the city centre, Great Jackson Street, Deansgate, the Northern Quarter, Ancoats NOMA, and Victoria North. Investors benefit from strong rental yields in these areas, influenced by factors such as population growth, employment opportunities, and urban regeneration.
What rental yield expectations can investors realistically have in the Manchester market?
This will vary from property to property and often hangs on the robustness of the property originally purchase. Things like boilers breaking or a leaky roof are expensive to fix and can eat heavily into one’s rental income, which is why most our clients tend to choose New Build, along with the warranties New Builds comes with, buyers like the reassurance that these types of properties offer with tendencies for lower maintenance charges and more consistent rental income.
Rental yield expectations in the Manchester market typically range between 4-7%, dramatically dependant on the property purchased. These vary depending on factors such as mortgage interest rates, property type, desirability, location, and market conditions. Conducting thorough research and due diligence is essential for accurately assessing rental yield potential and making informed investment decisions.
How important is local knowledge and networking in succeeding as a property investor in Manchester?
How do you leverage your local expertise and connections to benefit your clients?
We use our deep knowledge of the local market and our extensive developer connections to help our clients get the best deals available. By staying plugged into the pulse of Manchester’s property scene, we can bring exclusive, high-yield potential developments to our clients before they hit the mainstream market. This means our clients get early access to prime properties and first release prices. Our local insights also allow us to cherry-pick the best developments in the local market and offer these to our potential buyers before release.
Can you provide examples of how local insights have influenced successful investment decisions in Manchester?
Having a deeper understanding of the market dynamics, neighbourhood trends, and development opportunities, gives us a competitive advantage. Our knowledge of lesser-known local projects, such as transportation infrastructure developments, like the expansion of the Metrolink tram system, help us pinpoint areas poised for future growth and can influence the types of developments we bring on.
What are some key considerations or steps investors should take before entering the market?
Are there any common pitfalls or mistakes that investors should avoid?
- Buy Cheap, Buy Problems: Opting for the cheapest properties without considering their condition or potential issues can lead to unexpected expenses and difficulties in the long run.
- Attempting to Time the Market: Trying to predict the perfect time to buy or sell property can be risky. Market timing is difficult, and buyers may miss out on opportunities or make poor decisions based on short-term fluctuations.
- Letting Emotions Drive Decisions: Making investment decisions based on emotions rather than logic can lead to costly mistakes. It’s essential to remain objective and stick to a predetermined investment strategy.
- Lack of Patience and Unrealistic Expectations: Real estate investment is a long-term game. Expecting quick profits could cause disappointment, and one has to understand that building wealth through property can take time and patience.
- Insufficient Research and Due Diligence: Failing to thoroughly research properties, neighborhoods, and market conditions can result in poor investment choices. Conducting comprehensive due diligence to understand the risks and potential returns of each investment opportunity is key.
- Ignoring Fees and Expenses: Underestimating the costs associated with property investment, such as maintenance expenses, taxes, and management fees, can significantly impact profitability. Factoring in all expenses when evaluating the financial viability of an investment is vital.
- Lack of a Clear Investment Strategy: Investing without a clear plan or strategy can lead to haphazard decision-making and less than optimal outcomes. Investors should define their investment goals, risk tolerance, and exit strategies before entering the market.
Speaking with an independent financial advisor is an easy way to help an investor answer questions surrounding a potential investment and what the pitfalls could be.
What trends or developments do you anticipate shaping the future of the Manchester property market?
Are there any upcoming projects or initiatives that could significantly impact the market?
Initiatives like St. Michael’s Residences and projects in Victoria North and Great Jackson are expected to significantly impact the market. Additionally, upcoming masterplans such as Holt Town and Trafford Wharfside will expand the city center and improve connectivity, further enhancing Manchester’s appeal.
Finally, can you share a success story or memorable experience from your work in the Manchester property market?
One of our clients, Jonathan’s journey exemplifies our commitment to providing personalized support and tailored solutions to clients in the Manchester property market. He was looking for new property developments to expand his buy-to-let portfolio, and Rothmore Property’s service and quick response to his query were the deciding factors.
Our consultant took the time to understand Jonathan’s needs and pain points, asking the right questions to suggest properties that suited his requirements. Each investment case is unique, and our experienced team adeptly navigate challenges to achieve client goals collaboratively. This commitment reflects our dedication to ensuring a smooth and rewarding investment experience for every client, by presenting properties that fit the requirements of our client’s needs and wants. You can see Jonathan’s video review and in-depth walk-through of his experience on our website.
Photo by Muhammed Zahid Bulut.
