Manchester vs Liverpool: Which Is the Better City for Property Investment?

With many businesses and investors moving away from London, a rivalry has developed between two of the most popular Northern Cities. Manchester and Liverpool both present incredible opportunities for buy-to-let property, attracting students, young professionals, and families.

So, Manchester or Liverpool – which is the better city for property investment?

First, Why Choose a Northern City?

In years gone by, the north of the country was synonymous with economic downturns. As a result, major cities such as Sheffield, Manchester and Birmingham struggled, whilst many areas in the south appeared to thrive.

However, this is certainly no longer the case. Since the ‘Northern Powerhouse’ idea was introduced in 2014, key cities in the north have grown astronomically, attracting businesses, residents, and property investors.

London is likely to be entirely unattainable for those taking their first step on the property investment ladder. The property prices are staggeringly high, eliminating a considerable proportion of the nation. The lower cost of housing in the north combined with a substantial rental demand means investors can enjoy incredible rental yields, providing a healthy monthly profit.

The Facts and Figures

As mentioned, a massive draw to the north is the more affordable cost of housing in comparison to the capital and the south.

Zoopla reports that in the last 12 months, the average price paid for a home in Liverpool stands at £199,492.  In Manchester, this rises slightly to £230,715, but neither comes remotely close to the eye-watering average of £706,267 in the capital.

Rental prices fluctuate dramatically based on the property’s location, size, and quality, but yields of up to 6.1% can be expected in some regions of Manchester. However, Liverpool postcodes have routinely ranked as offering the best rental yields in the country, as high as 10%.

Business Breeds Quality Tenants

Choosing a city currently undergoing regeneration is an excellent strategy for every property investor. Regeneration attracts new businesses, buzzing to move into the area and bringing with them professionals searching for their next rental.

Graduates leaving their university city are prime tenants for one and two-bedroom properties as they are encouraged to follow the trends of reputable companies upon completing their degree.

Unilever bases itself in Liverpool, which undoubtedly attracts many young professionals to the city. However, The Knowledge Quarter promises the most significant transformation in a generation, with a potential development value of £2.2 billion. This innovative area focuses on science, health, technology, culture, and education, encouraging recent graduates to base themselves in the heart of Liverpool.

Conversely, the previous two decades have completely transformed the city of Manchester (with further regeneration plans in progress). BBC, Kellogg’s and Amazon all boast bases here, which has hugely boosted property values. For investors with a passion for commercial property, MediaCityUK offers a unique opportunity; with an eclectic and vibrant mix of hospitality and retail venues, enticing businesses from around the world.

Buzzing Student Hubs

Most property investors will be aware of the substantial financial rewards offered by purpose-built student accommodation.

Amazingly, Manchester has one of the largest student populations in Europe, with nearly 100,000 individuals enrolled across the five higher educational establishments. Young academics are drawn to the city due to the fantastic combination of world-class education and incredible amenities. Manchester has some of the best nightlife in the country, a buzzing LGBT+ community and the third-largest Chinatown in the UK. So it’s no surprise that high-quality, purpose-built student accommodation provides landlords with secure, reliable rental yields.

Liverpool houses slightly fewer students but still welcomes over 70,000 each year. There are many diverse communities in Liverpool, comforting for those moving away from the family home for the first time. Aside from the outstanding universities, Liverpool is home to unrivalled music venues and a cutting-edge arts and culture scene.

It’s not just domestic students that make purpose-built student accommodation so lucrative. The UK now welcomes over half a million international students each year, with a considerable percentage of those choosing to base themselves in the north.

Aside from the financial rewards, many investors love the stability offered by purpose-built student accommodation. Purchasing a well-located property and working closely with an excellent management agent means your property will attract tenants every year. So, whilst no investment can be categorically labelled as ‘secure’, purpose-built student accommodation is the favourite of many.

Tourist Havens

Whilst renters do not have the stability of owning their own home; their living arrangement has one huge advantage: flexibility.

The average homeowner in the UK stays put for 23 years, whereas renters tend to remain in one property for just 20 months.  Meaning, renters can easily move to the more ‘trendy’ hotspots and are free to follow work opportunities with relatively little stress.

Both Manchester and Liverpool have become tourist havens, attracting domestic and international travellers on a colossal scale. This is due to a combination of fantastic architecture, buzzing nightlife scenes and incredible arts venues in each of these cities. In addition, the four world-famous football teams attract fans from around the globe.

We all want to live in ‘the place to be’. So, investing in property in either of these world-class cities is sure to attract young professionals to your buy-to-let.

Other Cities to Consider

As explained, Manchester and Liverpool provide excellent opportunities for investors attempting to break into the north of England. However, there are many other options for those looking to diversify their income.

Sheffield provides an excellent choice for investors, and house prices have increased a staggering 42.3% since January 2010. The steel city offers opportunities for those looking for buy-to-let homes, with a vast range of off-plan properties available in the attractive S1 and S3 postcodes. Again, Sheffield is an excellent option for those with a passion for purpose-built student accommodation, with the two universities attracting over 60,000 students each year.

Just down the road sits another excellent choice – Leeds. This northern treasure is ideal for both buy-to-let homes and student accommodation. However, the rental yields fluctuate wildly across the city. It goes without saying that the city centre provides the most robust yields, but the popular L4 postcode averages a staggering 7.8% yield showing the potential of this northern investment.

Manchester v Liverpool Recap

  • Both Manchester and Liverpool provide excellent options for investors exploring areas away from the capital.
  • Following social trends and the implications of the coronavirus pandemic, many businesses are building bases in the north, attracting excellent tenants and lucrative opportunities for investment properties.
  • For those with a passion for purpose-built student accommodation, both Liverpool and Manchester offer fantastic opportunities, with world-class facilities and a combined population of over 150,000 students from around the globe.
  • Each of the cities attracts vast numbers of tourists each year, making them much sought-after cities for young professionals.
  • There are many other options in the north of the UK, including Leeds and Sheffield – popular for both buy-to-let homes and student properties.
  • For more, visit our pages about property investment in Manchester and property investment in Liverpool to find new projects.

Talk to Track Capital

Track Capital is an expert property investment company, dedicated to finding the perfect off-plan property for every investor.

We pride ourselves on being transparent and providing our services to clients completely free of charge. So, for a no-obligation chat about your next property investment, contact our team today at +44(0)203 627 3987 or [email protected].

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