United Kingdom Guide 7 min read

Manchester vs Birmingham: Where to Invest in 2025

By Apartment Checklist Team

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Important Legal Disclaimer

General Information Only: This article provides general information about property matters in the United Kingdom and does not constitute financial, legal, taxation, or professional advice. UK property law varies across England, Wales, Scotland, and Northern Ireland.

Not Financial Advice: This content does not take into account your individual circumstances, financial situation, or objectives. Before making any property-related decisions, you should:

  1. Verify current information on official government websites, including:

  2. Consult with qualified and regulated professionals:

    • FCA-Authorised Financial Adviser (for mortgage and investment advice)
    • Qualified Solicitor or Licensed Conveyancer (for legal matters and property transfer)
    • Chartered Accountant (for tax implications)
    • FCA-Regulated Mortgage Broker (for mortgage advice)
    • RICS-Qualified Surveyor (for property inspections)

Regulatory Compliance: Under UK law, only FCA-authorised firms and individuals can provide regulated financial advice. This article does not constitute FCA-regulated advice.

Information Currency: UK property laws, tax regulations (including Stamp Duty Land Tax), mortgage regulations, and government schemes change regularly. Information in this article may become outdated. Always verify current details through official government sources and regulated professionals before making decisions.

No Liability: While reasonable efforts have been made to ensure accuracy, no warranty is given regarding the completeness, accuracy, or currency of the information. Readers use this information entirely at their own risk.

The "best" UK city for property shifts every 18 months. Last year's winner may not win again.

Last January, forums called Manchester the UK's top spot. Yields were 6.5%. Prices rose 8.2% a year. Rental demand was strong. Everyone said: invest in Manchester.

So thousands did. Prices jumped 14.8%. Yields fell to 5.1%. Homes now take 6–8 weeks to let, not 2–3 weeks. The market got crowded and less profitable.

Meanwhile, Birmingham grew 14.8% in new build prices. Rent is set to grow 22.2% from 2024-2028. Yields stayed at 6.8% with 3-week let times. Those who chose Birmingham earned 12%+ returns. Manchester's investors earned 7-8%.

The lesson? Hot markets cool down. The question is not "which city was best?" but "which is best now?"

Quick Comparison

Manchester 2025:

  • Average 2-bed price: £185,000
  • Average monthly rent: £1,025
  • Gross yield: 6.6%
  • Time to let: 4–6 weeks (rising)
  • Price growth (past year): 6.5%
  • Rent growth (2024-2028 forecast): 14.8%

Birmingham 2025:

  • Average 2-bed price: £172,000
  • Average monthly rent: £975
  • Gross yield: 6.8%
  • Time to let: 3–4 weeks
  • Price growth (past year): 14.8%
  • Rent growth (2024-2028 forecast): 22.2%

They look similar. But Birmingham costs less to enter, grows faster, and has higher rent growth. For 2025-2028, Birmingham looks better.

Manchester: Still Good, No Longer Top

Strengths:

Economy:

  • GDP growth: 2.2% (UK average is 1.8%)
  • Jobs: 72.8% employed
  • Big employers: BBC, ITV, Siemens, Kellogg's, Amazon
  • MediaCityUK: 250+ firms, 7,000+ jobs
  • Airport: UK's third busiest

Property:

  • Mature buy-to-let market
  • Good transport (trams, buses, trains)
  • Two big universities (82,000+ students)
  • £1.5bn Northern Gateway project

Rental Demand:

  • Young workers leaving London (28% cost saving)
  • Tech jobs growing 15% per year
  • 82,000 students across two universities

Top Areas:

  • Ancoats: 8-9% yields, trendy ex-industrial
  • Salford Quays: 6.5-7.5% yields, near MediaCityUK
  • Fallowfield/Withington: 7-8% yields, students
  • Northern Quarter: 6-7% yields, young workers

Weaknesses:

Too Crowded:

  • Every investor knows Manchester
  • Fierce bidding (20+ bids in the first week)
  • Prices up 14.8% in 12 months (faster than wages)
  • Yields falling as prices rise faster than rents

Too Much Supply:

  • 15,000 new flats built in city centre (2020-2024)
  • Rents softening in premium areas
  • Student housing glut hurts HMOs

The key mistake: People invest in Manchester now based on past results. Markets look ahead. Today's hot city becomes tomorrow's crowded one.

Birmingham: The Rising Star

Strengths:

Big Changes Coming:

  • HS2 rail link (2030-2033): 49 minutes to London
  • Commonwealth Games 2022: £1bn in new roads and buildings
  • £14bn in planned projects
  • HSBC moved its UK HQ here (2018)

Property:

  • Lower prices (£172k vs £185k = £13k less needed)
  • Higher rent growth forecast (22.2% vs 14.8%)
  • Less investor rush (for now)
  • Five universities (80,000+ students)

Rental Demand:

  • UK's second-largest economy after London
  • Growing pool of workers (finance, tech, life sciences)
  • More affordable (4.9x earnings vs London's 13.7x)
  • First-time buyers +73% (they rent while saving, often exploring shared ownership)

Top Areas:

  • Digbeth: 8-10% yields, creative quarter, fast growth
  • Jewellery Quarter: 7-8% yields, young workers, bars
  • Moseley/Kings Heath: 7-8% yields, families, good schools
  • Harborne: 6-7% yields, well-off renters

Growth Drivers:

  • HS2 effect (15-25% price rise expected 2028-2035)
  • Paradise scheme (offices, hotel, homes by 2025)
  • Smithfield (£1.9bn project, done by 2032)
  • Tech hub (300+ startups)

Weaknesses:

Image Issues:

  • Seen as "second city" (investors overlook it)
  • Some high-crime areas (choose your spot carefully)
  • Transport not as good as Manchester (but getting better)
  • Always use a buy-to-let checklist when evaluating properties in unfamiliar areas

HS2 Risk:

  • Finish date unclear (2030-2033)
  • Northern leg cancelled (Manchester lost out, not Birmingham)
  • Budget may cause delays

Head-to-Head: 12-Month Outlook

Price Growth:

  • Manchester: 5-7% (mature, limited upside)
  • Birmingham: 8-12% (HS2 boost, undervalued)
  • Winner: Birmingham

Rental Yield:

  • Manchester: 6.0-6.6% (falling as prices rise)
  • Birmingham: 6.8-7.5% (better value)
  • Winner: Birmingham

Time to Let:

  • Manchester: 4–6 weeks (too much supply in places)
  • Birmingham: 3–4 weeks (healthy market)
  • Winner: Birmingham

Tenant Quality:

  • Manchester: Very good (high earners, stable jobs)
  • Birmingham: Good to very good (growing worker base)
  • Winner: Draw

Entry Price:

  • Manchester: £185,000 (2-bed average)
  • Birmingham: £172,000 (2-bed average)
  • Winner: Birmingham (£13k less to start)

Total Return (12 months):

  • Manchester: 6.5% yield + 6% growth = 12.5%
  • Birmingham: 7.0% yield + 10% growth = 17.0%
  • Winner: Birmingham (4.5 points better)

Note: These are averages. Smart investors pick the best areas within each city.

The Hybrid Plan (For Advanced Investors)

You don't have to pick one. You can invest in both.

Manchester Plan: Hold What You Have If you bought in Manchester in 2020-2022, keep it. You caught the growth. Yields are okay. Let it grow. Don't buy more at today's high prices.

Birmingham Plan: Buy Now Birmingham is where Manchester was in 2020-2021. Lower prices, strong base, big changes coming. Buy 2-4 properties by 2027 to catch the HS2 wave.

Example: James Has £120,000

Option A: All Manchester

  • Buy 1 property at £185,000 (25% deposit = £46,250)
  • 12-month return: £23,125 (12.5% on £185k)
  • Cash return: 50% on deposit

Option B: All Birmingham

  • Buy 2 properties at £172,000 (25% deposit = £43,000 each = £86,000)
  • 12-month return: £29,240 × 2 = £58,480 (17% on £344k)
  • Cash return: 68% on deposit
  • Bonus: Two homes, two tenants = less risk

Option C: Mix

  • Keep existing Manchester property
  • Put new cash into Birmingham (2 homes, £86,000)
  • You now have both markets

The data shows: Pure Birmingham gives better returns for 2025-2028. But two cities mean less risk. The right mix depends on what you already own.

Three-Year Outlook

Manchester (2025-2028):

  • Price rise: 5-7% per year (total 15.7-22.5%)
  • Yields: Steady at 5.8-6.4%
  • Total return: ~45-55%
  • Risk: Low (proven market)

Birmingham (2025-2028):

  • Price rise: 8-12% per year (total 25.9-40.4%)
  • Yields: Steady to rising, 6.8-7.5%
  • Total return: ~60-85%
  • Risk: Medium (depends on HS2 timing)

The truth: Manchester is not "bad" - it is mature. Birmingham is not "risky" - it is earlier in its cycle with more upside. Pick based on whether you want steady returns (Manchester) or higher growth with some risk (Birmingham).

What Next?

This guide does not cover: five other UK cities with potential (Liverpool, Newcastle, Nottingham, Leeds, Glasgow), the exact streets with 10%+ yields, or the best buy-to-let lenders.

The key question is not "which city was best?" - that looks backward. Ask: "Which city gives the best returns for my money, timeline, and risk over the next 36 months?"

You make money when you buy, not when you sell. Manchester at £185k today might reach £210k by 2028. Birmingham at £172k might reach £230k. Same £13k saved at the start, £20k more growth. That's the power of buying undervalued markets early. Before committing, always know what to check at viewings to spot issues that affect returns.

Property investment is not like football - you don't "support" a city. It's about putting your money where the data points. Use facts, not feelings.

Expert Advice

Before investing in property, check current data and speak to qualified experts:

  • Mortgage broker (FCA-regulated) - Check at FCA Register
  • Financial adviser - For strategy and risk
  • Accountant - For tax planning (ICAEW, ACCA, CIMA)
  • Solicitor - For legal work on purchases
  • Surveyor (RICS) - For surveys and valuations
  • Letting agent - For local market insights

Market Data:

Regulators: FCA | SRA | RICS | HMRC

Check Facts: GOV.UK | ONS

Note: This article is for guidance only. It is not financial, legal, or investment advice. Market data and forecasts are based on past trends and may not happen. Past results do not guarantee future gains. Property investment involves risk. Everyone's situation differs. Get advice from FCA advisers, accountants, and solicitors before investing. The author is not liable for any loss from using this information. Details were correct when published but may change.