During the last 10 years, London has been the favourite area for buy-to-let investors, with three times as many landlords buying houses in London compared to the North West of England. This is mainly due to the large London population and the high demand for rented accommodation in the capital.
Since the introduction of the 3% stamp duty on buy-to-let purchases in April 2016, however, investment in buy-to-let London properties has halved. A recent UK Finance survey found that in 2017, 1,126 commercial mortgages were used to purchase property in London compared to the quarterly average of 2,500 between 2014 and 2015.
Rental yields and capital growth from London property have fallen, hence landlords have been looking at other areas in Britain that provide better yields.
The student population in Manchester is growing and many companies have relocated to the area. Property prices are lower than in London, and rental levels are high, which means that many Manchester rented properties can provide landlords with good yields. Commercial mortgage interest rates remain low too.
London-based landlords buying Manchester property do face the issue of being based far from the North West, and locally based landlords tend to have better relationships with both tenants and letting agencies if they can meet face to face. Investors need to be aware that not every area of Manchester is good for buy-to-let investing, so they need access to local knowledge before purchasing.