One of the factors driving higher house price growth in Manchester is the increasing population and consequential higher demand for housing. The population of Manchester has increased by approximately 60,000 (from 2,710,00 to 2,770,000) between 2018 and 2022.
Housing is not being developed at the same rate, particularly due to the delays caused by the pandemic.
Student accommodation in high demand
There is a large student population in Manchester, because of the proximity to several top universities, which is increasing every year. This growth is not only affecting the demand for houses while the students are at university, but many graduates are also choosing to settle in the city or area that they have studied in.
Manchester can offer students most of the amenities that are available in places such as London. The regeneration projects in the city have improved facilities such as music venues, bars and restaurants, sports stadiums and many other amenities that graduates are interested in using. The vibrant nightlife ensures that it is an attractive location for a social life during university, as well as after finishing university.
Manchester was recently ranked the second-best city for nightlife in the UK, behind another northern city, Newcastle. Manchester is home to several popular music venues hosting live events and there are many different districts around the city centre for socialising.
‘Race for space’
Another factor that is influencing housing demand and pushing up the prices in Manchester is the ‘race for space’ that has emerged as a consequence of the Covid-19 pandemic. The concept termed the ‘race for space’ refers to the increase in the number of people who are looking for new properties that offer them more space, both indoors and outdoors.
The experience of being at home for long periods during lockdowns caused many people to reflect on the amount of space they have and how they would benefit from having a larger home. Working from home and the need for a home office is also a new priority that requires more space.
In places such as London, people are paying much more in rent for space compared to the same amount of space in most places in the North of England. Therefore, many people and businesses are now moving away from London and other southern locations in order to get better value for money elsewhere. According to Statista, inner London had an average monthly rental cost per square metre of £26.07 in 2020, while Manchester’s average rental cost was £11.12. London was the second most expensive city in Europe, with only Paris commanding a higher monthly rental amount.
Lower property prices
Despite areas like the North West seeing such a high increase in house prices, properties still cost significantly less than buying in London, on average. The average house price in the capital at the end of 2021 was just over £675,000, while the average house price in the North West was £233,000.
Due to this, it is easy to see why so many property investors are moving quickly to invest in these thriving areas of the North.
How rental growth will be impacted
Due to all of the reasons discussed above that are driving an imbalance in housing supply and demand, rental growth in the North is expected to increase at a rapid rate over the coming years. The huge difference between the average rental cost per sqm in London and Manchester is predicted to reduce, as the demand for property in the northern city grows.
Rents are forecast to rise by 4.5% by the end of 2022 across the UK but Manchester is expected to significantly outperform the average, with an expected rental growth of 16.5% over the next five years.
Right now, Advantage Investment can offer a variety of excellent Manchester city centre investments, priced 15% below market value, with panoramic city views, and located only a short distance from Deansgate, Victoria Station, and the central shopping district. To request the Manchester property brochures and learn more, email kate@Advantageinvestment.co.uk.
*Advantage Investment specialises in sourcing the best property investments for its clients.