Manchester property prices are rising faster than UK averages
The growth of Manchester property prices has regularly outstripped other cities in the UK over the last seven years according to new research.
The study, published by American commercial property group Cushman & Wakefield, reported that prices in Manchester have risen 34% over that time, 4% above the national average. Meanwhile, neighbouring Salford has enjoyed even faster growth of 8%, far higher than the 30% UK average.
Annual returns in the two boroughs stand at around 11% and 20% respectively with further steady increases expected until 2019 and a period of further accelerated growth from 2020 onwards.
The booming local rental market is also expected to continue growing. With Manchester already having been ranked the top city for property investors in the UK in a report by GoCompare, rental inflation is expected to run at 2% a year for the next three years followed by 3%+ gains from 2021.
Cushman & Wakefield associate director, Julian Cotton, noted that Manchester’s extremely active investor market is helping fuel growth with over half of the city’s entire housing stock being PRS.
“Considering the historically high rates of house price inflation in both Salford and Manchester, initial rental yields remain strong at present prices, averaging 5.3% for both areas. This resilience is a clear indication of underlying strong tenant demand as rates of rental inflation come near to keeping pace with house price growth.”
Local commercial property market also booming
Whilst news and reports on Manchester’s growing property market typically focus on the residential sector, local commercial real-estate is also booming.
According to Cushman & Wakefield’s North West Property Outlook, the commercial side of the real estate market saw over £4bn in investment last year – up 46% on 2016. And that’s despite the current period of political and economic uncertainty, with industrial sectors, in particular, driving a large chunk of completed deals.
Speaking at a breakfast presentation of the report, Darren Yates said that: “We are seeing a longer term trend which is the growth in industrial, leisure, alternatives and mixed-use, largely at the expense of retail. We’re also seeing an increasing shift towards mixed-use and a blurring of the traditional sectors.
“A more recent trend has been the slowdown in the shopping centre investment market, which reflects investor concerns around the structural changes going on in retail, particularly the secondary market.”
Over a quarter of Manchester’s available office space is occupied by established firms, predominantly within legal, financial services, media, tech and business service sectors, with local businesses also benefiting from a large pool of highly-skilled local workers.