Investors are increasingly looking beyond the centre when it comes to city living…

Manchester, a booming northern metropolis in post-industrial renewal, has no lack of major property investment opportunities at present.

According to investor Millmax, who published an advert in Landlord Expert, a new apartment in Great Northern Towers just off Deansgate in the city centre would produce an estimated return of between 816 per cent and 1,077 per cent in just two years, while buy-to-let landlords could rent it out for at least £1,100 a month.

Whether the actual investment turns out to be that good or even better, the future is likely to see such opportunities shifting away from the city centre. Investors will increasingly look beyond the centre when it comes to city living.

New development areas ‘a priority’

There are two reasons for this. The first is that space in city centres such as Manchester, Leeds or Birmingham is not unlimited and as the local economies grow, much of that land will be used for other purposes, such as new commercial premises.

Thus developers will need to look for new locations for development. Around Manchester, several developments in areas within easy reach of the centre, such as Salford Quays and the New Islington and Sportcity areas are already established.

Secondly, policy makers and experts in urban and social issues are concerned with ensuring that the economic benefits of the property boom have a positive effect on the often run-down and deprived inner city areas. In Manchester, a conference will be held this month to look at how to avoid the so-called doughnut effect, Urban Life reports.

’Spreading the jam’

The magazine notes that this term refers to a city centre as the jam in the middle, where the wealth is. In London, a big city before there were big cities, there is no clearly defined city centre as such, but in most modern cities a clear central business district usually exists, beyond which lie low-density inner areas.

These are the places where the conference will look at ways of spreading the jam.

In the case of Manchester, the article notes, much of this will centre on the Old Trafford area, which enjoys
both fame and enhanced transport links due to its sporting venues.

Urban Life notes that developments are already taking place here, such as the Pulse apartment development, which, its creators told the magazine, is being targeted at those who want to reside close to the centre but cannot afford to live in the centre itself. Such developments as this will thus create a new kind of market for buy-to-let investors.

‘New kind of market’ for BTL investors

The drive to develop the inner areas around city centres is not confined to one city. Ecotec Research & Consulting is looking at the experiences of Leeds and Birmingham as well as Manchester in their assessment of the economic impact of the growth of city centre living, the Yorkshire Post reports today.

Rob Hack, a consultant at Ecotec, told the paper that the aim was to expand development into the inner suburbs, citing the "urban village" plan for Holbeck, an area just south of the city centre, as an example.

If the plans are followed through to develop the inner areas of cities, developments such as Pulse may sprout up not just in Old Trafford, but in Holbeck and other inner parts of Leeds and Birmingham.

As well as going some way to stimulating economic revival in these areas, it could create a new market of buy-to-let clients whose budgets may not stretch to city centre living but will enjoy being close by amid the spreading jam.