Manchester has always been a happening place. The vibrant northern city was once the engine of the Industrial Revolution. Today, with one of the youngest populations in the UK, an exciting energy and a booming economy, Manchester is now.
for three years running by the Economist Intelligence Unit’s Global Liveability Survey. Its economy is the fastest-growing in the UK, with the largest professional and financial services sector outside of London. It is also home to the second-largest creative and digital cluster in Europe.
The city’s rapid rate of working age population growth has been accompanied by an equally rapid increase in the number of residents in employment, thanks in part to high graduate retention from the city’s four main universities. With this growing and distinctly young, skilled population, supply is struggling to meet sustained buyer and tenant demand and this is driving significant growth in the property market and encouraging strong yields.
There remains much in store for Manchester as the city prepares to welcome High Speed Two rail services from 2032, which will bring London within one hour and eight minutes of the city. GBP300 million has been pledged to build some 25,000 new homes over the next decade while GBP78 million has been allocated to investment in new theatres and exhibition spaces, recognizing the economic significance of Manchester’s cultural and entertainment offering.
Investment and regeneration
UK Prime Minister , of which GBP130 million will go to Greater Manchester. In addition a GBP10 million innovation fund has been set aside for small to medium businesses in Greater Manchester and Cheshire. The government has also contributed to the GBP110 million development of The Factory, a cultural centre for art, theatre, dance and music events that will also be a permanent home for the biennial Manchester International Festival. Undertaken by Rem Koolhaas’s OMA, it is due to be complete in 2020. The Royce Institute for Materials Research and Innovation represents further investment of GBP250 million; the largest single investment in science in the North of English since the 1970s.
High-speed rail networks, HS2 and HS3 are also underway, as well as a GBP1 billion investment by Manchester Airports Group and Beijing Construction Engineering Group to expand Manchester Airport. Local transportation has also been improved, having received GBP2.1 billion of investment which has been spent on expanding and upgrading the Metrolink network, improving bus routes and enhancing local rail services.
Piccadilly Station is the hub of HS2 within Manchester, and a central part of regeneration in the east of the city, in areas including New Islington, the Northern Quarter and Great Ancoats Street. The Piccadilly Basin regeneration scheme surrounds Piccadilly Station and aims to create a neighbourhood community comprised of office, residential, retail and leisure offerings.
New Islington specifically is undergoing massive regeneration in the form of the Manchester Millennium Village strategy, a masterplan covering 12 hectares with water park and canal network, while the eco-urban Cotton Field Park has benefitted from GBP4.5 million in external public realm funding from the North West Development Agency. As the Manchester city centre rapidly expands, this district has become firmly established as a desirable, dynamic place to live.
The property market
Manchester’s property market is experiencing a historic period of growth. Average property prices grew by an impressive 8.97% in the 12 months to November 2016, with apartments seeing an even larger price increase of 10.53% over the same period.
Recent forecasts predict significant future uplift, with 28.8% price growth expected between 2017-2021. A key factor driving this growth is the value that can still be found; average house prices in Manchester are 66% lower than London, whereas wages are only 30% below the London average.
Manchester is one of the strongest buy-to-let cities in the UK. Not only are 63% of households renting (24% above the UK average), but in the extended city centre four out of five apartments are rented. Average rental yields were around 6.8% between 2010 and 2016 while average rents in the city centre rose by 6.9% in 2016, reflecting the strong demand for rental properties. Rental growth of 20.5% is expected between 2017-2021.
Diminishing empty property rates portray an increasing demand for housing and scarcity of supply. As of April 2016 the vacancy rate average was 3.8%.
The endemic imbalance of supply vs demand looks set to continue in the foreseeable future. Despite attempts to significantly increase supply (construction is currently at its highest level since the 2008 global recession), this suggests that property prices and rents will continue to increase, further cementing Manchester’s position as one of the top spots to invest in property in 2017.