Manchester to enjoy continued growth for years to come
As the year comes to an end, we can reflect on another positive year for the local property market and Manchester’s economy as a whole. The city has frequently topped the charts in terms of price growth and demand throughout the UK with the local economy in boom-mode.
House prices in the region have consistently outgrown the rest of the UK, in five of the last six years in fact, including 11% last year which was more than double the UK average growth.
Manchester’s success story has been down to a number of factors. The student population has continued to increase, and those graduating have settled in the city after their studies, taking one of the many new skilled jobs within the tech, digital and media sectors as huge players such as the BBC, Co-op and Amazon set-up stall in the city.
A mass exodus of young professionals from London has benefited Manchester too with many choosing to relocate in growing Northern cities, whilst a changing mindset that now once again favours living in urban centres as opposed to satellite towns and neighbourhoods on the outskirts, especially again within the younger worker cohort, has seen the city’s central population boom from 10,000 in 2000 to nearly 70,000 residents today.
A leading light of the Northern Powerhouse, what does 2019 and the years to come look like for the capital of the North?
Property market growth to continue
Manchester has quickly emerged as a real alternative to property investment in the capital. London has seen price growth stagnation as affordability becomes more and more stretched for would-be buyers.
Manchester, however, has regularly outperformed the rest of the UK with annual average growth standing at around 4.2% compared to 2.4% throughout the rest of the UK.
For buy-to-let landlords and investors, there’s good news on the yield-front too as high demand for quality long lets increases. Rental yields are, as a result, expected to rise by 3.5% over the next 24 months alone, marking Manchester as the leading residential market for growth over the next five years.
And Londoners seeking more affordable pastures new are also influencing rental price growth in particular as demand increases, with CEO of Landbay John Goodall stating that: “The truth is there is now a twin speed rental market as London’s rent growth is dwarfed by cities such as Leeds and Manchester. This is being fuelled by the capital’s millennial exodus as countless young professionals realise there is more to life than London.
“This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.”
For the North West overall, house prices are expected to grow the fastest in the UK over the next five years at 21.6% – compared to 4.3% in London.
A rapidly growing economy
Property market growth can only be sustained through continued local economic growth, and business in Manchester is booming.
The influx of tech, digital and media businesses entering the city, as well as a strong start-up and SME base, means that the number of new jobs created will increase faster than anywhere else in the country.
As the number of city-centre residents rapidly increases, paid testament to by the increase in traffic and the ever-present cranes over the city, more and more shops, restaurants and cafes open to accommodate growing demand. And more residents, of course, means a growing demand for quality, rental accommodation.
And it’s not just central Manchester that’s benefiting. Satellite towns such as Stockport have also seen sustained growth with the Greater Manchester town enjoying 2.3% GVA growth in Q2 2018.
Research from Irwin Mitchell and the Centre for Economics and Business Research predicts that Manchester will emerge from Brexit in a strong position thanks to a diverse economy and attractive employability prospects, married with a knowledge-based business sector and thriving student population.
As a result, job numbers will increase faster than anywhere else in the UK, estimated at 16,300 new jobs over the next 36 months.
North West senior partner at EY, Bob Ward concluded that: “Manchester’s success is much lauded and rightly so – that the city is once again leading the UK with comparatively strong employment and GVA figures is of course great news.”