Manchester continued to outperform the other UK ‘big six’ regional cities across both the residential sales and rental markets, according to the latest research from global property advisor, JLL.
The ‘Big Six’ research, which tracks residential development activity, prices and rents across Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow, found that
Manchester achieved the highest level of rental growth across the ‘big six’ at 19.6%, as well as the second highest sales value increase at 4.9%.
The report cited the continued demand from young professionals and both international and domestic students as the key drivers for the increases in value, alongside a
significant reduction in supply.
In opposition to a number of the other ‘big six’ cities, the average annual rental growth of three-bedroom properties outperformed one- and two-bedroom homes at 33% -this is the largest increase across any of the markets reported and showcases the growing demand for families looking to stay in the city centre for longer.
The sales market has also seen significant increases, particularly for two-bedroom homes which grew in value on average by 7.4%, although the average cost of a prime two-bedroom property dropped by 2.5% over the same period.
Manchester has seen significant demographic growth over the last ten years, contributing to this increase in values with supply yet to keep pace with demand. The city’s
population has grown by 9.7% and employment has risen by 28% putting increased pressure on the housing market.
The increase in rents across the ‘big six’ clearly demonstrates not only the demand for city centre living but also the need for more homes. This is not exclusive to the
rental market, with a requirement for more homes of all tenures needed to address demand.
Steve Hogg, head of UK residential regions and North West, commented:
“Manchester continues to attract significant amount of inward investment, students and young professionals, looking to make the city their home. It’s
unsurprising given the employment and education opportunities that have been created here over the last decade.
“That said, although the city continues to build homes at a quick pace, demand is still outstripping supply, so there is work to be done to unlock land that is ripe for
development and create houses for the people that need them, and quickly.”
Louise Emmott, managing director at Kingsdene, added:
“Over the past few years we have seen enquiries for properties in the city centre across both sales and lettings rise dramatically. As our research shows,
this has been primarily driven by students and young professionals, but we’re also seeing more families choosing to stay in the city centre for longer which is creating even greater competition.
“At the same time, the end of the Help-to-Buy scheme and increasing mortgage rates are pushing up rental renewals as renters look to stay put while they save more money
or wait for rates to come down. All of this combined is causing stagnation in the market which needs to be addressed if we are to keep up with the pace of migration.”
Marcus Dixon, director of UK residential research at JLL, said:
“Younger residents and students are continuing to drive demand across the UK’s regional cities, as they prioritise the neighbourhood in which they live
and access to key amenities. This is a trend that we expect to continue, particularly as young professionals seek employment opportunities outside of the capital due to cost of living pressures.
“What has become clear through our analysis is that neither the sales nor rental market is currently able to keep up with demand. With fewer landlords entering the market,
and the rate of new builds slowing, government intervention is needed to restimulate the market and ensure that there are enough homes for the people that need them. By creating opportunities for people to live and work in our regional cities, it will stimulate further inward investment and contribute to the success of our cities long term.”
