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Why Manchester is a Prime Location for Property Investment
Although we’re here to discuss why you should invest in off-plan property in Manchester specifically, it’s important to understand why property investment, in general, is profitable here.
When it comes to property investment, Manchester is right up there as one of the best spots. This city has completely changed itself in the last few years and has become a real magnet for investors. But why is Manchester such a great place for investment? There needs to be a mix of strong economic growth, great transport, and a big need for housing. Let’s break it down.
Strong Economic Growth: £62.8bn and 6% Growth Rate
One of the first things we look at when investing is the strength of the local economy, and Manchester’s is booming. The city’s economy is now worth £62.8 billion, growing at around 6% a year. That’s massive, and it really drives the local property market.
It’s pretty simple: if the economy is doing well, property prices tend to rise too. This is why so many of us are seeing significant capital appreciation in Manchester. Also, the north-west has consistently done better than other UK cities, which gives investors even more faith. If you look at the bigger picture, you can see that the city is growing, and it’s growing quickly.
Excellent Connectivity: Metrolink Tram, Bus Network, Trains, and Manchester Airport
Another major reason Manchester is such a hot spot for off-plan real estate investment is its connectivity. Let’s be real, nobody wants to live in a place that’s hard to get around. With the Metrolink tram network running 40 million journeys a year and a strong bus system, getting across the city centre and out to the suburbs is easy.
Plus, with train stations like Manchester Piccadilly and Victoria, the rest of the UK is just a quick train ride away. We’ve even got the recently upgraded Manchester Airport, which just completed a £1 billion overhaul. Good transport links like these make certain city centre areas really desirable for young professionals, which is key if you’re looking for strong rental yields.
High Demand: +56,000 New Residents and +25.8% Property Price Rise
Manchester’s home market is in a huge need. More than 56,000 new people are expected to move into the city in the next few years, and there aren’t enough homes to accommodate them.
This has already pushed house prices up by 25.8%, and we’re expecting that trend to continue for at least the next five years. In August 2024, the average house price in Manchester was £248,000. The best part for investors?
When the need is high and supply is low, you’ve got a recipe for serious capital appreciation. This is exactly why we’ve seen so many investors, both seasoned and new, getting into off-plan investment properties here. With limited space and growing interest, Manchester is one of those cities where getting in early can pay off big time in the long run.
Source: Office for National Statistics
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Benefits of Investing in an Off-Plan Property
Investing in an off-plan property can be a great way for those who want to get into a growing real estate market early. If you buy a house that hasn’t been built yet, you lock in the prices that are good now. The house could be worth a lot more when it’s done. If you invest in a hot market like Manchester, this can be a great way to make sure your money keeps going up over time.
Lower Prices: Secure a Property at a Lower Price Before Completion
One of the biggest advantages of buying off-plan property is the pricing. Developers tend to offer prime properties at below-market prices to attract early investors, which gives you the chance to secure a property for significantly less than its value at completion. It’s not uncommon to see properties off-plan priced 10–20% lower than similar completed homes.
Source: Office for National Statistics
For example, new-build apartments in Manchester city centre—especially in popular spots like Northern Quarter or Castlefield—are often sold at a discount because developers want to hit their pre-sale targets.
As the construction progresses and the development nears completion, property values usually rise, which means you’re sitting on potential capital appreciation without having done much more than signing the contract.
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Customisation: Choose Your Finishes and Make the Property Your Own
One more thing investors like about off-plan investments is that they give them creative freedom. When you buy a finished buy-to-let property, everything is set in stone.
But when you go for a property off-plan, you’ll often have the chance to change some things according to your preferences. With expert guidance, you might be able to choose your preferred flooring, kitchen finishes, or bathroom fittings, meaning you can put your personal stamp on the property before it’s even built.
This also means that when you rent it out or eventually sell, your property stands out because it’s tailored, modern, and fits the tastes of today’s investors or renters. Tenant moving to areas like the Manchester City Centre who want new, fashionable residences that suit their own interests may find this especially enticing.
Modern Living: Enjoy the Latest Amenities and Features
The possibility to provide new homes with contemporary characteristics is one of the nicest aspects of purchasing off-plan. These days, developers often add high-end features like smart home technology, energy efficiency, and sleek architectural design.
A study by UK Construction Online found that over 70% of new-build investors now put energy-efficient homes at the top of their list of priorities. Many of Manchester’s new developments, like X1’s residential developments, are made with this in mind. They offer a modern way of life that draws tenants who value modern features.
This not only makes the property more appealing but also increases its rental potential. For property investors, it’s a win-win: you’re getting a home that’s desirable now and built to last with tomorrow’s skyline in mind.
Why Choose Off-Plan Over BRR Strategy for Property Investment?
Off-plan property sales have become a go-to strategy for many savvy investors, especially in competitive markets like Manchester. In simple terms, off-plan sales mean you’re buying a property before it’s built.
This strategy has several advantages over the popular BRR strategy (Buy, Refurbish, Refinance), which has been widely used across the UK for increasing property value through renovations. While BRR can be effective, off-plan investing often offers a more hands-off, less stressful route with some financial perks that BRR simply can’t match.
With the BRR strategy, as soon as you take out a mortgage to purchase the property, you’re immediately on the hook for monthly payments—whether you’ve started the renovation or not.
Because of this, it can be hard on your finances, especially if you have to pay the mortgage and repair costs at the same time. You also won’t get any return until the property is ready to rent out or sell. This is a daunting process to keep track of all these financial obligations that don’t pay off right away.
When you buy an off-plan home, on the other hand, your mortgage doesn’t start until the building is finished, which is usually one to two years later. This gives you lot of time to get ready; by the time your mortgage starts, the house is usually ready for rental, which will assist in mortgage payment.
Another significant advantage for property investors is that the Bank of England’s base interest rate recently dropped from 5.25% in August to 5%. As of November 2024, the average rate for a five-year fixed mortgage was approximately 3.89%. This shift has contributed to a slight decrease in mortgage rates, making financing a bit more affordable.
Looking ahead, interest rates are anticipated to continue falling. The Office for Budget Responsibility (OBR) even says that the Bank Rate might reach 3.5% in the next few years. Rates for five-year fixed mortgages may also go down to around 3.5% by the end of 2024, according to some lenders.
As an off-plan investor, what does this mean for you? Changes in interest rates can happen in either way, but the current outlook suggests that interest rates may be lower by the time your house is finished and your mortgage starts.
This could result in lower mortgage payments compared to what you’d pay if you took out a mortgage now using the BRR strategy.
Essentially, the off-plan for-sale investment allows you to ride out the market fluctuations and potentially benefit from more favourable mortgage terms when the time comes.
How Does Off-Plan Sales Work? From Research to Completion
Investing in off-plan real estate starts with a thorough study of the development and the neighbourhood. Once you have located a Manchester property fit for your investing objectives, you will need to reserve your unit usually by paying a reservation fee.
This secures your property and locks in the price, protecting you from price hikes as demand increases during the build. After that, you’ll exchange contracts and pay an initial deposit—usually 20-25% of the property’s value.
While the property is being built, you won’t need to start paying your mortgage right away—one of the key benefits of off-plan.
Your mortgage begins only when the development is finished and you pay the outstanding sum. By now you will be able to rent the house, and the rental revenue will help to pay the mortgage.
Given how the housing market might evolve over time, and with the potential for decreasing interest rates in the future, there’s a good chance that when your mortgage begins, your monthly payments will be lower than they are today.
You can get a lot more out of your investments when you delay your mortgage payments and take advantage of low interest rates. This will set you up for long-term growth.
So, the BRR approach can bring in rental income quickly, but buying homes before they are built usually gives better long-term returns. Let’s simplify this with two examples.
Investor A (BRR Strategy): This investor buys a property for £200,000 but negotiates a 20% discount, reducing the price to £160,000. After spending £20,000 on renovations, the property’s value rises to £240,000 in six months. With a rental yield of 6%, the BRR investor earns £14,400 annually. But, the ongoing maintenance costs can eat into their profits.
Investor B (Off-Plan Investment): This investor opts for a newly built property and puts down a £60,000 deposit on a home valued at £240,000. Once the building is finished, the property increases in value to £322,000. When they rent it out, they achieve an 8% rental return, boosting their equity. They also benefit from price increases during the construction phase and avoid the costs of renovations.
In short, while the BRR strategy can bring in cash quickly, investing in off-plan properties usually leads to better overall returns. This approach allows your property to appreciate in value and saves you from the hassles of renovations.
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Expert Tips for Successful Off-Plan Property Investments
Although off-plan investments could be a wonderful strategy to get ahead in a difficult market, you should exercise caution when making them. You should also choose the right location and a reliable developer. Start by doing the following:
Doing Your Research
Doing research is crucial when it comes to off-plan investing. The developer’s glitzy brochures and assurances that it will be a success are not to be taken at face value. What are the current home values, and how do you think they will grow in the future? Look at upcoming infrastructure projects or regeneration areas where you might get in before the Manchester property market really heats up.
For example, here in areas like Ancoats and Salford Quays, property values have surged dramatically over the past several years, indicating fast reconstruction. Further, do remember to review at the developer’s previous work as well. Have they successfully finished comparable projects within the allocated budget and on schedule?
Have previous customers voiced any concerns? Investigate reviews, talk to prior investors, and visit a few finished properties. Later on, this kind of exhaustive due diligence will help you avoid much trouble.
Choose the Right Location
When it comes to real estate investment, location is everything. For off-plan investment opportunities, this becomes even more crucial because you’re purchasing into future potential. Areas with high demand, have good transport, and have nearby shops, schools, are the top choices when it comes to real etstae investment.
In fact, young working professionals are especially interested in neighbourhoods like Castlefield and Deansgate in towns like Manchester because they are close to places to work and have fun. Areas that are part of ongoing regeneration projects can offer even greater potential for capital appreciation.
Think about the rental needs too. Are there enough tenants in the area to ensure your property is let quickly? Is the area appealing to the demographic you’re targeting? If your off-plan property is in the right location, then you can expect higher rental yields and better long-term growth, so it pays to think ahead.
Work with a Reputable Developer
When you’re buying off-plan property, you’re putting a lot of trust in the developer. For this reason, it’s important to make sure you only deal with reliable professionals with past experience. Look for developers with past success doing related tasks and get references. Have they completed former developments on schedule? Have there been any notable delays or quality problems?
Don’t be afraid to ask the developer tough questions—find out how they handle unforeseen circumstances, whether they provide regular updates during the build, and what kind of ongoing support they offer once the property is complete. A developer’s track record with a solid reputation often has property management services in place, which can be a huge advantage if you plan to rent the property out.
One thing to keep in mind here is that it’s not just about getting the property built, it’s about ensuring it’s built to a high standard and delivered on time.
Angel Gardens is located in an up-and-coming district of Liverpool. It is in close proximity to two major regeneration projects: the £150 million Project Jennifer and the £5.1 billion Liverpool Waters scheme.
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Mortgages for Off-Plan Properties
When it comes to financing an off-plan property, most lenders offer something called a mortgage agreement in principle, which allows you to secure a mortgage offer even though the property won’t be completed for another year or two.
Typically, you’ll be required to pay a 10-20% deposit upfront when you exchange contracts. The big advantage here is that your mortgage doesn’t actually begin until the property is complete, meaning you’re not making mortgage payments during the build period.
You have a lot of time to save or think about what to do next. The fact that the property value might go up by the time the flat is ready makes it even more appealing.
In 2025, if you put down a £20,000 deposit on a £100,000 flat and by the time it’s finished, the property value has gone up to £120,000, you can get out of the deal and sell at the higher price. This could mean doubling your initial deposit in just two years, turning that £20,000 into £40,000 in equity.
Best Places in Manchester for Off-Plan Property Investment
One of the UK’s top cities for investing in off-plan property, Manchester has it all, a vibrant economy, a rising population, and continued regeneration projects.
Real estate investors might find great prices on buy-before-completed houses in the city, which has a mix of well-known landmarks and developing districts. Here is a list of some of Manchester’s top off-plan investment sites that you can consider:
Ancoats
Ancoats has become one of the most high-demand areas in Manchester for both investors and renters. Originally an industrial area, Ancoats has seen a notable rebirth within the last ten years to become a hip, energetic community. Working professionals like this area since it is now bursting with independent stores, restaurants, and trendy cafés.
Ancoats’s proximity to the Northern Quarter and Manchester city centre makes off-plan developments a popular alternative. The continuous growth and popularity of the area point to great possibilities for capital development and high rental yields.
- Average property price: Around £350,000 (for a modern two-bedroom apartment)
- Average rental yields: Approximately 5-6%
Salford Quays
Located in Greater Manchester, Salford Quays is another great place for off-plan investment. Slightly outside the Manchester city centre, it has undergone extensive renovation recently, mostly around MediaCityUK. Some big media companies, like BBC and ITV, are based in this area.
This has brought in a lot of young workers looking for modern homes that are easy to get to. There is a mix of business and residential areas in Salford Quays, as well as stunning views of the water. The ongoing development of luxury residential here means there’s plenty of opportunity to secure below-market prices on off-plan real estate before they fully appreciate in value.
- Average property price: Around £270,000 for a two-bedroom apartment.
- Average rental yields: Typically 5.5-6.5%
Castlefield
Castlefield is an old part of Manchester that is famous for its lovely canals and green places. It has become a very popular place for both renters and buyers because it is in a quiet area close to the busy city centre of Manchester.
Castlefield off-plan investments give investors a chance to get great homes in a quiet, beautiful area while still enjoying city life. The area continues to attract property developers aiming to combine the charm of Manchester’s industrial past with modern, eco-friendly developments. This makes it a fantastic option for those kind of investors seeking long-term capital growth.
- Average property price: Around £325,000 for a modern apartment.
- Average rental yields: Around 5-6%
Deansgate
Because of its central location and constant demand for rental space, Deansgate is an excellent off-plan investment location in Manchester. Young working professionals who work in the city centre find this area a desirable place to live as this come with a lot of bars, restaurants, and stores.
Deansgate also benefits from excellent transport links, including Manchester’s Metrolink and Deansgate Station, giving it added appeal. Off-plan developments in Deansgate offer investors the chance to buy into one of the city’s most prestigious addresses, often with modern, high-spec apartments designed to cater to the growing demand for city-centre living.
- Average property price: Around £400,000 for a two-bedroom apartment.
- Average rental yields: Approximately 4-5%
Northern Quarter
This part of Manchester is a pretty famous area. Northern Quarter is mostly known for its unique and creative atmosphere, and artists are becoming more and more interested in it. Northern Quarter is a great place to go if you want to be part of a lively, culture community because it has so many unique shops, pubs, and live music venues.
It’s also just a short walk from Piccadilly Station, making it ideal for commuters. Off-plan housing options here are highly sought after due to the area’s trendy reputation and proximity to major commercial centres. The Northern Quarter continues to see high rental demand, making it an excellent option for investors looking for strong rental yields and long-term capital growth.
- Average property price: Around £300,000 for a modern two-bedroom apartment.
- Average rental yields: Typically 5-6%
New Islington
New Islington is another neighbourhood that has witnessed significant revitalisation recently, and it is located just next to Ancoats. With new residences, schools, parks, and independent shops, New Islington—once a dilapidated area of the city—has been turned into one of Manchester’s most interesting neighbourhoods. It used to be a run-down area of the city.
The area’s canalside developments offer something a little different from the typical city apartment, making it a favourite for those looking for a bit of serenity while still being close to the action. Moreover, off-plan properties here offer great opportunities, as the area continues to grow in popularity and house prices rise.
- Average property price: Around £320,000 for a modern apartment.
- Average rental yields: Around 5-6%
Conclusion
Manchester is defiently one of the best cities in the UK for off-plan investment. Its rapid growth in the economy, high housing demand, and ongoing regenration work appeal to real estate investors. There are unique attractions in Ancoats, Salford Quays, Castlefield, Deansgate, Northern Quarter, and New Islington. Manchester offers a number of property opportunities for long-term capital growth or high rental income.
Customising choices, flexible payment plans and the additional value as the house is developed help you to lock in a fantastic price now by acquiring an off-plan property. Manchester is a terrific place for both seasoned investors and those just starting out since its popularity only rose, so early entry may truly pay off.
Area Guide
Tom Collins
I’m your go-to broker, on a mission to make things simple and smooth when making your investment with me! My journey at Flambard Williams has been shaped by working in various financial fields and working closely with clients and their goals.
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