As the government put in place a number of measures to get the UK real estate market back on its feet after the Covid-19 pandemic outbreak in 2020 (like lowering the stamp duty and a mortgage guarantee system that offers high credit value (LTV) mortgages ), Property purchases and prices have gone through the roof. Home buyers and investors alike are putting their money in brick-and-mortar retail to be safe in the face of the ongoing economic uncertainty we are experiencing after the pandemic and the aftermath of Brexit.
While acquiring a rental property can come with risks to ensure you can meet your mortgage repayments and not be left with a vacant property that costs you money, savvy investors have long recognized the potential of the purchase. Properties to be rented that are aimed at student tenants. The pandemic hasn’t scared off potential students either, as in 2020 the number of 18-year-olds applying to university in the UK increased by 40% (and the number of international student applications increased by 10%). There has also been an increase in students seeking better quality accommodation and more independence than standard on-campus student housing can usually offer.
A constant pool of tenants is certainly a bonus, but you also need to make sure that you are getting a healthy return, reasonable rental returns, and house prices where you don’t have the chances of paying for the property in the first place, which will affect your bottom line.
When it comes to an ideal student property location, Manchester, in the north west of England, is sure to be the spot. With an average rental return of 5.45% (one of the highest of any UK city) and high capital growth expectations for average house prices (+ 28.8% by 2025), the city’s real estate market is certainly a must-see.
Manchester also has an impressive pool of potential tenants as it is home to five universities: The University of Manchester, Manchester Metropolitan University, The University of Salford, The University of Bolton and University Academy 92. All offer a wide range of undergraduate and postgraduate degrees – and business courses for over 100,000 students annually. The city is also a mecca for international students, drawn by its culturally diverse landscape with around 200 different languages spoken across the city on a daily basis.
Prospective students will also benefit from Manchester’s excellent facilities such as the Trafford Center shopping complex, the Manchester Arena (Europe’s largest indoor arena) and numerous galleries, museums and theaters, extensive leisure facilities such as the Manchester Aquatics Center, the Manchester Regional Hockey Center and the Manchester Boxing Center of Excellence as well as great outdoor spaces like Heaton Park, Alexandra Park and the nearby Peak District National Park, not to mention a variety of festivals, live music and a vibrant nightlife! The vibrant club and pub scene includes exciting entertainment options like Printworks, cozy, traditional pubs like the Kings Arms and Marble Arch, and lively cocktail bars like Lola Lo. So it is hardly surprising that the city was also voted 15th of the 48 best cities in the world by the student bible Time Out.
When it comes to calling home, coveted suburban hotspots like Sale, Bowden, Hale, Altrincham, and Didsbury can come at an expensive price that is more geared towards professionals, families, and retirees, but has popular student neighborhoods like Fallowfield, Rusholme, and Hulme a lot more bang for your buck. In general, the M3 (city center) and M6 areas offer the best rental returns (around 7.89% in some cases), while the postcodes M5 and M6 near the University of Salford and areas south of the city center are more affordable home prices.
Average house prices in the student hotspots of Rusholme, Hulme and Fallowfield have been £ 163,232, £ 170,026 and £ 199,527, respectively, over the past 12 months. Significantly less than the national average (£ 255,000), the average for Manchester (£ 286,559) and the Greater Manchester Region (£ 250,609) combined. There is also a wide variety of properties in the city, from Victorian, Edwardian, and interwar periods to more modern developments and apartment complexes.