Invest North West!

How long are the good times going to last, and how can property investors make the most of them?

In Manchester alone, new developments are still coming onto the market at an astonishing rate. Urban Splash has just unveiled two buildings - Moho and Burton Place - in up-and-coming Castlefield. The company also has new homes at New Islington - Manchester's Millennium Community, and the first apartments in the UK designed by architect Will Alsop. In Spinningfields, Manchester boasts the largest new development in Europe. Abito, meanwhile, has had its ultra-modern living pods - "compact apartments", squeezing in every imaginable amenity - snapped up in Greengate.

The story is similar in Liverpool, with many stylish new living spaces on the horizon, including City Lofts' towers at Princes Dock, and Downing Developments' Lennon Studios, on the site where the former Beatle was born.

Would there have been this demand for different types of accommodation even ten years ago? Not according to Les Lang, managing director of Abito. "There's been an amazing transformation", he says of Manchester, "and this has had a huge effect on the housing market. Things really started to take off for the city with the first Olympic bid, and Manchester airport has been crucial to its development. Manchester has become much more cosmopolitan. Now we have parts of the BBC and even MI5 moving here!"

These high-profile investors are only the most obvious signs of a much more widespread economic boost that the North West has experienced in the last few years. Figures from the Northwest Regional Development Agency (NRDA), published in February 2005, show that economic growth rates in the region have overtaken the UK average in the years since 1998, particularly in Greater Manchester, with employment rates rising rapidly in some areas. The NRDA forecasts continued growth in the next few years in population and employment, particularly in financial and business services.

What this economic boom has meant is that there is now a much bigger market for high quality, innovative property developments in the North West. And not just in the centre of Manchester and Liverpool: Urban Splash has just completed the first phase of its Budenberg HAUS Projekte development in Altrincham (the site uses combined heat and power - a first for Urban Splash - to reduce CO2 emissions).

With all these recent developments in the North West, are there opportunities for investors? Buying to let is always the tempting option in areas where things are taking off, with the lure of additions to a property portfolio that can pay for themselves,through rental yields and capital gain. But are there still gaps in the buy-to-let market in the North West? Isn't it as saturated as the Pennines on a rainy day?

Certainly first time investors are at the back of the queue: there has been a phenomenal expansion in buy-to-let in the last 2 to 3 years. But the signs are that, though things may have cooled off slightly in recent months, there are still openings for wise buyers.

The latest report on the buy-to-let market, issued in March by Nationwide's specialist lender, UCB Home Loans, gives grounds for cautious optimism. According to UCB managing director Charles Reed, while rates won't be as high as they have been, "We are expecting growth to continue over the next few years." The UCB report shows that experienced investors are still adding to their portfolios of buy-to-let properties.

The medium-term forecast would seem to be especially promising for the North West. UCB says that, when considering where to look, investors should bear in mind prospects for increasing employment, growth in student numbers, and prospects for transport and other infrastructure development. The North West scores highly in these areas, for example with the recent merger of Manchester's universities. A major influx of large organisations such as the BBC can also help to bolster demand for rented accommodation.

So what should prospective buy-to-let investors be looking for? According to Gary Needham of property investment advisors Blenheim Bond, as well as looking in the most obvious places in the heart of Manchester and Liverpool, it's a good idea to consider areas towards the periphery valued at less than £150,000. "Look at areas where regeneration is only getting started, rather than places where you're coming late to the party," says Gary. "And be very careful to ask letting agents what they need - what types of properties, in which locations, the lettings market is currently short of. There are no real secrets in property investment - it's all about research."

For investor Adam Ingrams, too, who has a large buy-to-let portfolio in the North West, to make buy-to-let work now takes more homework than it did. "Look in areas that are adjacent to places that are already fashionable," he says. "And for unbiased advice, try ringing the planning department of the local council. You can also get to predict patterns of regeneration by looking at where the Government is targeting investment in new homes and businesses (for example, by getting information from the Office of the Deputy Prime Minister), and by finding out the areas where house prices are low compared to others nearby (the Land Registry has this kind of information).”

“Bargains are still to be had in buy-to-let, but investors need to take more of a long-term view when planning the purchase of a property. It's sensible to plan to hold on to a property for at least ten years, during which time it should be able to provide a steady rental income - you can no longer depend on capital gain."

Though they may have to work harder than they did, then, it seems that it's not too late for new landlords to make money from the buy-to-let market, and make the best of the North West.

Do your research: Nwda.co.uk for regional development agency statistics/economic strategy Englandsnorthwest.com – a round up of cultural, leisure and sporting events