When considering the best UK cities for property investment, Manchester consistently stands out. The question many investors ask is simple: Is Manchester a good place to invest? The answer, supported by market performance, strong rental demand, ongoing regeneration, and capital growth forecasts, is a resounding yes, and this article will explain in detail why.

Is Manchester A Good Place To Invest? At a Glance

Manchester has rapidly emerged as a global investment hub. In fact, Colliers’ mid-2024 ‘Top UK Residential Investment Cities‘ analysis ranks Manchester third in the UK (and #1 in England) for residential investment. It boasts an £80 billion economy and global transport links, and offers living costs well below London. Major companies like JP Morgan, Octopus Energy and Rolls-Royce have opened offices here, fueling jobs growth and housing demand. These factors, plus Manchester’s rich culture and student population, make it a top pick for buy-to-let investors.

Manchester’s economy and demographics are especially strong. Growth is forecast around 2.2% per year with unemployment at 3.7%. The city-region now has about 600,000 residents, set to grow by 30,000 by 2031. It’s a tech and innovation hub, home to a £5 billion digital ecosystem and over 10,000 tech companies. There are over 100,000 university students in Greater Manchester (the UK’s third-largest student base), and many stay after graduation. In fact, about 51% of Manchester’s grads remain in the city, often renting in areas like Hulme and Fallowfield. This steady influx of young professionals bolsters long-term rental demand.

Prices and rents have been rising consistently. As of mid-2025 the average Manchester home price is £247,000 (up 7.6% from 2024), with further rises forecast (reaching £310k by 2029). Average rents are £1,312/month, the highest in the North West, having jumped 8.5% year-on-year. Vacancy remains low (below 3% in prime areas), reflecting very strong demand. The result is high yields and growth: rental yields in Manchester run ~6.5% on average, well above London’s 3–3.5%. Analysts project roughly 20% total price growth by 2028, thanks to ongoing demand, supply shortfalls, and major new developments.

Population Growth and Demographics

Manchester’s population profile is another boon for investors. Greater Manchester has 2.8 million residents (with about 600,000 in the city itself), and the city’s population has been one of the fastest-growing in the UK. The city attracts young professionals and students: it hosts over 100,000 university students across its institutions. Importantly, many graduates stay on after finishing their degrees, about 46% of North West graduates end up working in Manchester. This creates a steady pipeline of new renters (both students and young professionals) year after year.

Demographically, Manchester is young (median age ~30) and international, with substantial net migration. The city centre in particular has seen a housing boom: tens of thousands more people are choosing city living. This sustained population growth directly fuels demand for housing. As people relocate for jobs and study, they need places to live, ensuring Manchester has above-average tenant demand and keeping vacancy very low. In short, a growing, youthful, well-educated population means steady rental demand from both students and professionals.

Housing Market Performance

Manchester properties remain relatively affordable compared to London or the South. The average Manchester home price was about £242,000 in mid-2025, far below the England & Wales average (£269k). By type, a typical Manchester home in June 2025 cost £457k (detached), £309k (semi), £239k (terraced) or £194k (flat). These lower entry prices mean investors get more property for their money, which helps yields (see next section).

Prices have trended up over the long term. For example, one analysis found Manchester’s average price was £247k in March 2025, up 7.6% year-on-year. (ONS data showed a small dip in mid-2025 – the average was £242k in June 2025, 4% below the June 2024 level, but this was from a historically high base and is consistent with UK-wide market cooling in late 2024.) In any case, most experts forecast continued growth: Savills and JLL see mid-single-digit annual increases (roughly 3–5% per year) over the next few years as demand outpaces supply. Overall, capital values in Manchester are on an upward trajectory, supported by limited new housing (especially family homes) and ongoing city renewal.

In recent years Manchester’s house price growth has outperformed many other UK cities. Industry forecasters predict 20% cumulative growth by 2028, roughly double the UK average. Even after a brief cooling, analysts expect renewed price appreciation driven by the city’s fundamentals. Investors benefit from relatively low entry prices plus realistic upside. In short, Manchester combines affordability with better-than-average growth prospects.

Rental Market and Yields

Strong tenant demand means Manchester is very rental-friendly. As of July 2025 the average private rent in Manchester was about £1,316 per month, up 5.8% year-on-year – well above wage inflation. That level made Manchester the most expensive city in the North West to rent, slightly above nearby commuter towns (e.g. Stockport ~£1,464). Notably, around 62% of Manchester residents rent privately – the highest rate of any UK city, meaning over 380,000 people live in buy-to-let homes, and demand has stayed consistently high.

This strong rental market translates into attractive yields. In central and popular postcodes, gross yields are typically around 5–6%; in student- or value-focused areas, yields can hit 7–12%. For example, the Fallowfield student area (M14) averages about 12% gross yield, and other student/commuter zones in north Manchester often see 7–8%+. Even in the city core (M1, M2, M3), yields are higher than the national average (~4.5%), because purchase prices are lower than London but rents remain strong. Overall Manchester’s mean gross yield is roughly 5.6%, noticeably above the UK average.

Key points for investors: gross rental returns in Manchester are generally solid, especially on well-managed stock. A typical long-let flat can easily cover mortgage costs and fees when yielding 5–6%. Of course one must account for voids and expenses, but on average Manchester landlords enjoy positive cashflow. In addition, rents have room to run – they grew faster than incomes in recent years, but are still below London levels. This means there is upward pressure on rents, further boosting returns.

Manchester’s short-term rental (STR) market is also very profitable. The city’s mix of business tourism, sports and cultural events, and student visits keeps Airbnb/holiday lets busy. According to Airbtics, an average entire-home Airbnb in Manchester earns about £21,000 per year (60% occupancy, £105 ADR), roughly double what the same home would earn as a long-let. Top areas (like the Northern Quarter) see even higher revenue (≈£31.6k/year). This means that converting some units to short-lets (where regulations permit) can dramatically increase cashflow. Practical advice: even a 20–30% allocation to short-lets within a portfolio can raise blended yields. Investors just need to account for licensing, management costs, and potential void periods, offsetting these with the much higher nightly rates. When done carefully, STRs in Manchester can be a compelling supplement to traditional buy-to-let income.

Regeneration and Infrastructure Projects

Manchester has a massive pipeline of redevelopment that is reshaping the city and boosting property values. Major masterplans are underway, and proximity to these sites is a prime investment criterion. For example:

  • St John’s (Granada Quarter) – A £1 billion project on the old ITV Granada studios. It includes ~560,000 sq ft of new workspace, The Factory arts venue and public spaces, and will create about 10,100 new jobs in creative and digital sectors. This will inject huge demand for nearby housing and amenities.
  • NOMA (City Centre) – A 20-acre new neighbourhood between Victoria Station and Northern Quarter. It comprises ~4 million sq ft of offices, homes, hotels and retail. It already houses Co-op HQ (3,500 jobs) and a tech hub, and will ultimately support about 5,400 direct jobs NOMA is drawing vibrant businesses (digital, innovation) into the city core.
  • Circle Square (Oxford Road Corridor) – A massive mixed-use campus around Symphony Park. It will deliver ~650 modern apartments plus offices and hotels. Current phases are completed and VITA (1,100-bed aparthotel) is full. In total Circle Square is projected to create about 9,000 jobs and adds ~£500m GVA per year.
  • First Street (Oxford Road Corridor) – An office, culture and co-living district near the University and Central Library. Upon completion it will have ~2,200 co-living beds and is expected to generate c.16,000 jobs (3,500 already in place) in creative and tech industries. It has already become a cultural hub (HOME arts centre, BBC productions) and draws a young workforce.
  • Manchester Airport City – A £1 billion campus at the airport. Over 5 million sq ft of offices, R&D labs, hotels and logistics space will be delivered, aimed at high-tech, e-commerce and aviation industries. Airport City alone will create ~16,000 jobs. With MAG’s expansion (supporting 50m pax by 2030), Airport City will keep the suburban rental market buoyant.

Each of these projects is huge: together they will add tens of thousands of jobs (often well-paid) and thousands of new homes. For investors, this means zones around these schemes often see above-average capital growth and rent rises. In practice, targeting properties adjacent to or within these regeneration corridors is a smart play. Such areas benefit from new parks, retail, schools and transport links – upgrades that push up values. In summary, Manchester’s regeneration engine is in full throttle, and investing near these flagship developments is a clear way to capture the upside.

Beyond these mega-sites, Manchester is also improving its transport and amenities. The Bee Network tram/train expansion and upcoming Northern Powerhouse Rail (HS3) will vastly improve connectivity. New road bridges and high streets refurbishments are underway citywide. The Manchester Airport rail link upgrades, and additional Metrolink extensions (toward Middleton and East Didsbury), increase the catchment for both commuters and local renters. Such connectivity projects broaden where tenants can live while accessing jobs, boosting the appeal of well-connected suburbs. In short, infrastructure investment multiplies housing demand across the region.

Education and Student Market

The scale of Manchester’s education sector is a major asset for landlords. The city is one of the UK’s largest student hubs (over 100,000 students among universities like Manchester, MMU, Salford). This creates two rental pools: student term-time lets and a follow-on wave of graduate renters. Many students convert into young professionals in Manchester, recall 46% of local grads stay in the city. This “internal pipeline” of renters keeps letting in certain areas virtually continuous.

Accordingly, student-dominant areas are perennial hotspots. Districts like Fallowfield, Rusholme, Hulme, and the Oxford Road Corridor see almost full occupancy year-round. Fallowfield (M14) is famously the UK’s top-yield area, with gross yields around 11–12% thanks to cheap flats and constant demand. Hulme and Oxford Road (zones M13/M15) also yield ~8–9%. Outside term-time, these flats are often taken by young professionals and couples, so they rarely lie empty.

From an investor’s perspective, having student-friendly HMOs or apartments in these zones is a guaranteed cashflow play. The risks (e.g. voids in summer) are offset by the enormous occupancy and the pipeline of new students each year. In practice, many landlords let to students in September and renew with professional tenants after graduation. Strategy tip: consider a mix of licensed student HMOs and professional lets. That way you lock in occupancy from October–June and then re-market to grads or young pros.

Lifestyle and Liveability

Manchester’s quality of life enhances its property appeal. The city consistently ranks high for culture, entertainment and urban amenities. World-class music venues, galleries, festivals and nightlife draw residents and visitors alike. Manchester’s two Premiership football clubs (United and City) also bring global interest and support local fan tourism. Major new venues (Co-op Live arena, Aviva Studios theatre) fill the calendar. The city has thousands of tech and creative jobs but also pleasant parks (Heaton Park, Platt Fields, and the redeveloped Mayfield Park) and improving high streets, which attract families and young professionals seeking a vibrant urban lifestyle.

This vibrant city life means demand is year-round. Young professionals want city-center flats near bars and transport; older renters seek leafy suburbs with schools but still city access (e.g. Didsbury, Altrincham). Manchester offers this full spectrum. Moreover, living costs here are lower than in London. One benchmark: a home averaging £242k versus £523k in London (per Land Registry). Many people move to Manchester for this combination of urban opportunity and relative affordability. In short, Manchester “feels” like a leading global city at a lower cost, which sustains housing demand.

International Investment Appeal

Manchester has caught the eye of international investors too. According to recent data, it accounts for a large share of FDI in the region. The city’s high yields and growth, plus a weak pound (post-Brexit), make UK buys attractive to overseas capital. Large overseas funds and expatriate buyers are active in Manchester’s prime new developments. For example, Savills reports a growing proportion of sales are to overseas buyers, drawn by ~5–6% gross yields and a strong leasehold/investment market.

Additionally, Manchester has two top-tier universities (often cited as a measure of city strength), multiple research centers (Graphene Institute, National Graphene Centre, Future City Institute), and accolades like UNESCO City of Music, Education, and Lifelong Learning. These global recognitions (and events like BBC shifts to Salford) give confidence to foreign investors that Manchester is a stable, world-class city. Overall, its combination of high returns and lower risk (UK property is seen as safe) means more international capital is flowing in, another boost for prices and making Manchester a good place to invest.

Is Manchester A Good Place To Invest? Future Outlook

The outlook for Manchester’s property market remains very positive heading into 2025 and beyond. Analysts’ forecasts and trends all point to continued growth. For example, the JLL and Savills property surveys both predict roughly 3–5% price rises per year in Manchester over the mid-2020s. One report projected cumulative growth around 20% from 2024–28, outperforming the national average. Rents are predicted to continue rising as well (professionally 4–5% per annum), given the tight rental supply and population influx.

Meanwhile, the city is building homes at only a fraction of the rate of demand. Manchester needs thousands of new homes each year to keep up, but current construction (even with 11,000+ on site) lags far behind demand. That supply squeeze, combined with growing demand, should keep upward pressure on both values and rents.

Finally, macro factors favor Manchester: its economy is forecast to grow faster than almost any other UK city through 2028, driven by new investments and start-ups. A recent EY forecast even ranks Manchester as the second-fastest-growing regional economy (2.2% annual GVA growth). Any further interest-rate cuts or housing policy incentives would only amplify this momentum. In short, the same fundamentals, jobs, people, projects, that have driven Manchester’s boom are still in place, suggesting the property market will continue to deliver for investors.

Conclusion: Is Manchester A Good Place To Invest?

The evidence is clear to show making Manchester a good place to invest in 2025. Its robust economy, rising population (especially of students and young professionals), and large-scale regeneration create sustained housing demand. Property here is more affordable than in the South, yet delivers stronger-than-average rental yields (commonly 5–8% gross). Regeneration projects and infrastructure upgrades will drive further capital growth in key zones, and the thriving short-term rental sector offers extra upside. All in all, Manchester combines affordability, growth and resilience. For buy-to-let or capital-gain investors alike, Manchester ticks all the boxes. It’s not just a cliché, by most metrics Manchester is truly a great place to invest right now. If you would like to explore Manchester properties, get in touch.