Why We Avoid Manchester, Liverpool and North East Property Investments
September 24, 2026
We have over 34 years of property investment experience. That is an awfully long time (thanks for making us feel old).
During those 34+ years, we have watched property markets change beyond recognition. We have seen towns and cities develop, decline, recover and, in some cases, become almost unrecognisable from the investment markets they once were. We have also seen more “creative property investment strategies” than we care to admit, including guaranteed rents, off-plan apartments, student schemes, hands-off developments, rent-to-rent models, property bonds, pooled investments and just about every new way somebody can think of to package bricks and mortar.
Throughout that time, we have consistently chosen not to develop HMO investments in Manchester, Liverpool or the North East of England.
Why?
Because everyone else is doing it there.
Why on earth would we deliberately develop investments for ourselves and our investors in markets where thousands of other landlords, developers, sourcing agents, investment companies and overseas buyers are all chasing the same properties and the same tenants? From our perspective, it makes absolutely no sense.
Our approach has always been fairly simple: boring is better, and when everyone starts piling into the same investment strategy in the same location, we become increasingly interested in doing the opposite.
That philosophy is one of the reasons we have spent decades developing professional HMO investments in South Yorkshire rather than following the crowd into Manchester, Liverpool, Newcastle, Middlesbrough, Sunderland and other heavily marketed investment locations.
The Problem With Following Everybody Else Into The Same Property Market
Property investment has a strange habit of attracting people towards whatever is being marketed most aggressively at that particular moment.
Manchester became the place everyone apparently had to own an apartment. Liverpool followed a similar path. Newcastle and large parts of the North East became enormously popular with property sourcing companies and HMO deal packagers because the underlying residential stock could often be bought cheaply.
Then thousands of investors receive remarkably similar adverts.
“Invest in Manchester.”
“Invest in Liverpool.”
“Invest in the North East.”
“Buy this fully managed HMO.”
“Secure this luxury apartment before prices increase.”
The CGI images become increasingly impressive. The developments acquire increasingly extravagant names. A rooftop terrace appears. Somebody puts a champagne bar on the brochure. The word “luxury” gets used approximately seventeen times.
Eventually you have to ask a fairly obvious question.
Who is actually going to live in all of them?
Property only works when genuine underlying demand supports the number of properties being supplied. It does not matter how attractive the CGI is, how recognisable the city name is or how persuasive the salesperson sounds.
If hundreds of investors are buying remarkably similar properties aimed at remarkably similar tenants in remarkably similar postcodes, competition increases.
That means your tenant has options.
Lots of them.
Manchester Property Investment: A Trophy City With Enormous Competition
Manchester is probably one of the best examples of what we mean.
We regularly see investors assume that because Manchester is a large, internationally recognised city with significant employment and population growth, practically any investment property there must therefore be a good investment.
That simply does not follow.
Manchester has attracted an enormous amount of domestic and overseas property investment. Apartment developments have appeared across the city and surrounding areas, while HMOs have been developed extensively in traditional shared-housing locations.
The purchase price is also considerably higher than the areas in which we generally operate. Government House Price Index figures showed the average Manchester property at approximately £251,250 in June 2026. By comparison, ONS figures put the average Doncaster property at approximately £172,000 in July 2026.
Paying more does not automatically mean receiving a better investment.
For HMO developers, Manchester presents another obvious issue. Manchester City Council currently has an Article 4 Direction covering the city which removes permitted development rights for changing a Class C3 dwelling into a Class C4 HMO. In practical terms, somebody cannot simply assume they can buy a suitable residential house and turn it into a small HMO using permitted development rights. Planning permission is required.
For us, that is not particularly attractive.
We would rather operate in carefully selected South Yorkshire locations where we understand the tenant base, understand the streets, know the rental ceilings, manage the properties ourselves and can assess demand property by property rather than buying somewhere simply because the city name looks impressive on an investment brochure.
Liverpool Has Become Another Magnet For Property Investors
Liverpool has followed a similar pattern.
For years it has been marketed relentlessly to UK and overseas investors. City-centre apartments, student accommodation, HMOs and off-plan developments have all been pushed heavily by developers and property investment companies.
The problem is not that Liverpool has no property market or no rental demand. Of course it does.
The problem is the sheer amount of investor attention focused on particular parts of the city.
Liverpool City Council already requires planning permission for HMOs housing seven or more people throughout the city. More significantly for small HMO investors, properties being converted into HMOs for three or more people within its designated Article 4 area also require planning permission, with the council identifying 11 wards where these additional controls apply.
Again, we look at that and ask why we would deliberately join the queue.
Liverpool’s average property price was approximately £189,000 in July 2026, according to the ONS, compared with around £172,000 in Doncaster. Liverpool prices had also risen strongly over the preceding year.
Investors can easily end up paying a premium because they recognise the name “Liverpool”, particularly when buying through companies whose entire sales proposition centres around selling an exciting city rather than analysing the individual investment.
A famous postcode does not pay your mortgage.
Tenants do.
The North East Has The Opposite Problem: It Often Looks Too Cheap To Ignore
The North East is slightly different, and this is where a lot of inexperienced investors get caught.
Manchester can attract investors because of the trophy-city name and large development schemes. Parts of the North East attract investors because the property looks incredibly cheap.
That cheap purchase price can become almost irresistible.
You see a terraced house for a fraction of what you would pay elsewhere and suddenly the spreadsheet starts producing spectacular percentages. A sourcing company converts it into an HMO calculation, inserts an optimistic room rent, adds a refurbishment budget that appears to have been written sometime around 2009 and presents the investor with an enormous projected yield.
Cheap property, however, is frequently cheap for a reason.
We have repeatedly warned investors about buying property purely because the acquisition price is low. Local employment, tenant demographics, deprivation, population movement, competing HMO supply, achievable room rents, Article 4 restrictions, management intensity, resale demand and realistic commercial valuations all matter.
We have seen an increasing number of HMO deals packaged around areas such as Middlesbrough, Hartlepool, Newcastle and Sunderland because the entry price makes the headline yield look exceptional.
We are simply not interested in chasing cheap houses for the sake of manufacturing an attractive percentage on a sales brochure.
Newcastle Already Shows What Happens When HMO Concentration Becomes A Planning Issue
Newcastle is another good example of why investors need to look beyond the headline property price.
Newcastle City Council currently operates several Article 4 Directions controlling changes from normal residential properties into HMOs in parts of the city, including areas of Jesmond, Heaton, South Gosforth and Sandyford.
In 2026, Newcastle City Council also publicly stated that officers had been instructed to look at reducing the number of HMOs as part of plans aimed at creating more balanced residential communities.
That should at least make an HMO investor stop and think.
We are not saying there is not a single successful HMO anywhere in Newcastle. That would obviously be ridiculous. We are saying that when large numbers of landlords and developers concentrate on the same investment model in the same locations for long enough, councils eventually start paying attention.
Planning restrictions tend not to appear because nobody is developing HMOs.
Article 4 Areas Should Make Investors Ask Why
Article 4 is often treated as a minor technical inconvenience by companies selling HMO investments.
We look at it differently.
When councils introduce or retain restrictions specifically controlling the conversion of normal family houses into HMOs, investors should understand the wider context rather than simply trying to find a way around the planning restriction.
Manchester has citywide HMO Article 4 controls. Liverpool requires permission for smaller HMOs across designated wards. Newcastle has multiple HMO Article 4 areas. Similar restrictions and HMO planning policies exist elsewhere across northern England.
These policies do not automatically mean every restricted area is a bad investment location, nor does Article 4 itself prove that an entire city is “oversaturated”. What it does show is that HMO concentration and housing mix have become significant enough in those locations for councils to exercise additional planning control.
For us, that matters when deciding where we want to put our own money and where we are prepared to develop properties for our investors.
Overseas Investors Have Been Sold The Trophy-City Dream For Years
Overseas investors are particularly vulnerable to trophy-city marketing.
If you live in Singapore, Hong Kong, Dubai, Kuwait or elsewhere overseas and somebody asks you to name UK cities, Manchester and Liverpool are considerably more recognisable than Doncaster, Rotherham or many of the South Yorkshire towns in which we operate.
Developers know that.
Marketing companies know that.
Property sourcing companies certainly know that.
It is considerably easier to sell a glossy Manchester apartment to somebody thousands of miles away when the brochure contains a skyline, a luxury reception, an imaginary rooftop resident drinking coffee and a list of nearby landmarks.
The investor is buying familiarity.
We would rather they bought numbers.
We have never selected an investment location because it produces the most impressive brochure. We select areas based on what happens after the brochure has been thrown in the bin and somebody actually needs to find a tenant, collect the rent, maintain the property and eventually refinance or sell it.
That is considerably less exciting.
It also happens to be considerably more important.
Swanky Apartments Do Not Automatically Make Good Investments
One of the property industry’s recurring mistakes is assuming expensive-looking property equals good investment property.
It does not.
There are investors who have bought extremely attractive city-centre apartments only to discover that dozens of almost identical units are available within the same development, hundreds more are available within walking distance and a substantial pipeline of new apartments is still being built nearby.
Your £250,000 apartment is not competing in isolation.
It is competing against the landlord on the floor above, the investor next door, the development across the street and potentially thousands of other rental units across the city.
The same principle applies to HMOs.
You can have granite worktops, designer furniture, neon signs and whatever fashionable interior somebody on Instagram currently believes an HMO requires. If the street is surrounded by competing HMOs offering similar rooms to the same tenant demographic, your expensive interior does not magically remove the supply.
We have spent 34+ years learning that boring fundamentals usually beat fashionable property strategies.
Guaranteed Rent Schemes Are Another Trend We Chose Not To Follow
Our tendency to do the opposite of the crowd extends beyond location.
We also watched developers increasingly market apartments and investment properties using five-year guaranteed-rent arrangements.
We never joined them.
A guaranteed rent figure written into a sales brochure does not change the underlying economics of a property. Somebody has to fund that guarantee. Investors need to understand who is providing it, how financially secure that organisation is, whether the purchase price has effectively been inflated to fund the rent and what happens when the guarantee ends.
We would rather develop an investment that works because tenants genuinely want to live there.
No gimmick required.
That may sound boring, but boring property investment has served us rather well for more than three decades.
Why We Prefer South Yorkshire
We have remained focused on South Yorkshire because we know it.
More importantly, we operate here.
We do not develop an HMO, collect a sourcing fee and disappear. Our in-house group remains responsible for the property after development through lettings, management, compliance, inspections and maintenance.
We currently manage hundreds of tenants each month and have developed more than 450 HMO properties over our history. That gives us direct exposure to what tenants are actually asking for, what rents they will realistically pay, which locations perform and which property layouts cause problems.
We develop professional HMOs with five or six bedrooms, every bedroom has its own ensuite, rooms comfortably exceed minimum standards, properties undergo substantial back-to-brick refurbishments and gardens and usable communal areas form part of our model.
We also refuse to develop in Article 4 areas.
Our strategy is not to find the cheapest possible shell or chase the biggest theoretical gross yield. We look for areas where there is sustainable professional demand without having to compete against an endless supply of virtually identical HMO rooms.
The lower acquisition costs available across the South Yorkshire locations we target also leave more room for the extensive refurbishment required to create the standard of property we actually want to manage.
We Would Rather Be Boring Than Join A Property Bubble
Property investors often become uncomfortable when they feel like everybody else is making money somewhere they are not.
That is how bubbles grow.
One person buys in Manchester. Their friend buys in Manchester. A sourcing company starts pushing Manchester. Social media fills with Manchester developments. Overseas agents start selling Manchester. Suddenly investors stop asking whether another apartment or HMO is actually needed and start assuming they need to buy one because everybody else already has.
Liverpool has experienced the same relentless investment marketing.
Parts of the North East have experienced it from another direction, with extremely cheap houses turned into highly attractive headline-yield calculations and circulated repeatedly through sourcing networks.
We want absolutely nothing to do with following crowds for the sake of it.
If an investment only looks attractive because everybody is talking about the location, we become suspicious rather than excited.
Our Investment Strategy Has Never Been About Chasing What Is Fashionable
After more than 34 years, we have learnt that property investment does not need to be exciting.
In fact, excitement frequently becomes expensive.
We want realistic purchase prices, realistic refurbishment costs, realistic rents, genuine tenant demand, sensible leverage, manageable competition and properties we are comfortable managing ourselves for years after completion.
There is no need for imaginary GDVs.
There is no need for absurd projected rents.
There is no need for five-year rental guarantees.
There is no need to buy an apartment simply because somebody has produced a particularly attractive CGI of it.
And there is certainly no need to pile into the same HMO market as everybody else and then act surprised when your prospective tenant has another 40 rooms to choose from.
For us, boring is better.
It is why we have avoided Manchester, Liverpool and North East property investments despite watching countless developers, sourcing companies and property gurus repeatedly promote them.
We prefer to operate where we know the market, where we can control the development, where we can manage the finished asset ourselves and where our investment decisions are based on genuine tenant demand rather than whichever UK city currently has the largest marketing budget.
Our fully managed HMO investments are developed from ordinary residential shells into substantial, back-to-brick refurbished five and six-bedroom professional HMOs. We handle the acquisition, development, planning, licensing, compliance, tenant finding, management, inspections and ongoing maintenance under one group.
If you are looking for a hands-free HMO investment built around realistic numbers rather than property-market hype, view our current opportunities at: