Manchester and Liverpool: Things first time student landlords need to know

Becoming a student landlord for the first time is a big step. There are various perks to being a student landlord, such as rarely having gaps between tenants, a constant stream of rental income, and the opportunity to be a HMO Landlord and let out a larger number of bedrooms.

Manchester is the third most populated city in the UK with plenty of interesting shops and restaurants, the Lowry Museum, Salford Quays, and of course, two mammoth football teams. Liverpool is home to the Beatles, the iconic docks, a buzzing city centre, and Anfield and Goodison Park. Therefore, it is little wonder why every year so many young people flock to both of these cities in North West England to study.

For first time student landlords, we’ll compare investing in properties in these two cities.

Commuter links for tenants

When students move to a new city to start university, they often leave their car at home. This is due to a combination of the expense of running a vehicle and the convenience of public transport in cities.

When choosing a buy-to-let, make sure it is well connected and served by efficient direct transport links to attract tenants. Luckily, the central and suburban areas of both cities are well served by great transport links for commuters.

Manchester transport 

Manchester’s intricate Metrolink tramway connects the towns around Greater Manchester, including Oldham and Stockport, to the city centre. 

Opting for a buy-to-let near a tram station will attract tenants. In particular, East and West Didsbury are popular green suburban areas that both have tram stops.

Liverpool transport

The Merseyrail network connects areas of South Liverpool to the city centre, with stations such as Liverpool South Parkway, Cressington, and Aigburth. North Liverpool has Merseyrail stations in Bootle, Kirkdale, Walton and more. It is a wise idea to try and get a rental property that is closeby to a Merseyrail station, just to make it an easy commute.

Alternatively, there are extensive bus routes that run throughout the city that your tenants can take advantage of. 

Which city is more affluent?

Areas of Manchester such as Hale, Hale Barns, Didsbury Village, West Didsbury, East Didsbury, and Withington are all affluent areas of Manchester which could attract plenty of renters with stable incomes.

Liverpool also has attractive affluent areas including Allerton, Aigburth, Woolton, West Derby, and Halewood. 

We looked at the average salary in both cities as a key indicator of how affluent they are on the whole. The average annual salary in Manchester is just under £5,000 higher than in Liverpool. 

Source https://uk.talent.com/salary?job=liverpool 

Crime rates 

Tenants want to be reassured they are safe and secure in your property. Inevitably, crime stats tend to be a little higher in UK cities compared to more rural areas. 

In 2021-2022, the crime rate in Manchester was 126.7 crimes per 1,000 of the population. In Liverpool for the same period, it was 128 crimes per 1,000 people, so slightly higher.

For peace of mind, take out a comprehensive landlord insurance policy to protect your building and contents. This will cover you in the event of theft, damage, loss of rent and more. At CIA, we compare quotes from 9 leading providers to get you the best deal. 

You will have no shortage of demand from student tenants

Manchester and Liverpool are home to approximately 150,000 students from seven universities, one musical conservatoire, and a performing arts school. Many students in Manchester and Liverpool alike come from other parts of the UK or overseas to study in the two cities. And logically, these students need somewhere to stay.

Become a successful student landlord by caring for the property and fulfilling your responsibilities. As the reliable stream of income comes in, you will be able to expand your property portfolio. 

Average rental prices are higher in Manchester

Rental prices play an important role in your rental yields, and you may decide to get a larger property to accommodate more students. Want to get a three or four+ bedroom house for student tenants? Our research using ONS private housing data shows that the average rent for a three bedroom property in Manchester in 2022-23 was £1,164, compared to £758 in Liverpool. Likewise, the average monthly rent for four+ + bedroom properties in Manchester is £1,871 – considerably higher than the average in Liverpool of £1,064.

So, you could bring in a higher monthly rent figure in Manchester than in Liverpool. Don’t forget that student landlords also have a diverse range of expenses, such as repairs, maintenance, letting agent or management fees, and covering council tax, which students are exempt from. Also, you will need to take out a robust student landlord insurance policy.

Source https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/privaterentalmarketsummarystatisticsinengland 

Terraced buy-to-lets are more affordable in Liverpool

You will also need to consider the initial purchase price of a student property to make sure you get a healthy yield.

Landlords can expect to pay an average of £241,529 in Manchester, and £153,558 in Liverpool, for terraced houses. This significant price difference makes Liverpool the preferred choice when buying your student rental property.

Source https://www.rightmove.co.uk/house-prices/  

Getting a mortgage can be difficult for first time student landlords

The small print and legalities behind student lettings can be complicated, hence some providers are less enthusiastic about lending to first time student landlords. Anyone looking to purchase their first student buy-to-let in Manchester or Liverpool with a mortgage should bear this in mind. However, it is certainly do-able and many first time landlords manage to get a mortgage every year.

Popular neighbourhoods with student tenants can change over time

Typically popular neighbourhoods for student tenants in these two cities include Fallowfield, Didsbury, Rusholme, Wavertree, Toxteth, and Smithdown Road. However, this can change over time. For instance, Hulme is an exciting inner city area which has become increasingly popular with students in recent years. Equally, Aigburth in South Liverpool has seen more and more student residents moving in.

First time landlords should keep an open mind when looking at neighbourhoods to invest in. Up and coming student areas could hold opportunities to help you maximise your rental yields. 

Being a first time landlord is a challenge, but if you go about it correctly, becoming a student landlord in Manchester or Liverpool could be a first-class long-term investment choice that you won’t regret.  

Methodology

We sought data on average rent prices, the purchase cost of terraced houses, and the average cost of hiring an emergency plumber to help communicate the opportunities and challenges that first time landlords in Manchester and Liverpool need to know.  The data we collected allows landlords to compare the potential results of investing in properties in both cities.

Sources 

https://www.hamuch.com/cost/emergency-plumber

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/privaterentalmarketsummarystatisticsinengland 

https://www.rightmove.co.uk/house-prices/   

https://www.statista.com/statistics/1289595/crime-rate-in-manchester/ 

https://uk.talent.com/salary