Manchester city centre has witnessed an unprecedented surge in rental prices, making it one of the most competitive markets in the UK. This article explores the factors driving this growth, the impact on the housing market, and the outlook for the future. The rise of Manchester’s city centre rentals has been fueled by a combination of factors, including the end of the Help to Buy scheme, rising mortgage rates, a surge in population and unprecedented job creation.
The Rental Boom in Manchester
According to research from property services firm JLL, Manchester’s city centre rental prices grew faster than any other market outside London in the second half of 2022. The annual growth rate reached an impressive 22%, outpacing Birmingham, the next largest market, which saw an 18% increase.
The Rental Boom in Manchester
According to research from property services firm JLL, Manchester’s city centre rental prices grew faster than any other market outside London in the second half of 2022. The annual growth rate reached an impressive 22%, outpacing Birmingham, the next largest market, which saw an 18% increase.
This surge in rental prices can be attributed to the end of the Help to Buy scheme and the rise in mortgage rates following the September mini-Budget. As a result, prospective buyers have delayed their decisions to purchase and have remained in rented accommodation for longer periods, putting additional pressure on an already squeezed rental market.
Manchester’s Population Surge
The population increase in Manchester has had a significant impact on rental demand, driven by a combination of factors such as job creation and the presence of major companies. Here’s how these elements are interconnected:
Population Growth:
Manchester has experienced substantial population growth over the past few decades. This growth is due to factors such as urbanization, immigration, and a relatively high birth rate. The city’s appeal as a vibrant cultural and economic hub has attracted people from various regions and countries.
Job Creation:
The expansion of the job market in Manchester has played a crucial role in increasing rental demand. Several factors contribute to job creation:
- Economic Diversification: Manchester has diversified its economy beyond traditional industries like manufacturing, with a strong focus on sectors such as technology, finance, healthcare, and creative industries. This diversification has led to more job opportunities across various skill levels.
- Corporate Relocations: Many major companies have chosen to establish or expand their operations in Manchester. This has created a need for a skilled workforce and subsequently increased demand for housing.
- Start-up Ecosystem: Manchester has a thriving start-up ecosystem, which not only creates jobs but also attracts talent from around the world.
Major Companies Operating in Manchester:
Several major companies have a significant presence in Manchester, further driving job creation and rental demand. Some notable examples include:
- The Co-operative Group: A well-established retail and financial services company headquartered in Manchester.
- JD Sports Fashion: A leading sports-fashion retailer with its roots in the city.
- Boohoo Group: A global online fashion retailer founded in Manchester.
- Auto Trader: An online automotive marketplace that originated in Manchester.
- Siemens: The global technology conglomerate has a substantial presence in Manchester, particularly in the healthcare and manufacturing sectors.
- MediaCityUK: This media and technology hub is home to major companies like the BBC and ITV, attracting professionals in the media and creative industries.
Increased Housing Demand:
As the population grows and more jobs are created, the demand for housing, both rental and owned, has surged. This increased demand has led to rising property prices, making renting a more viable option for many residents.
The city’s housing market has responded to this demand with the development of new rental properties, including apartments and co-living spaces.
Infrastructure and Transport Improvements:
Investments in transportation and infrastructure, such as the expansion of the Metrolink tram system and improved rail links, have made it easier for people to commute to work in Manchester, including from surrounding areas. This accessibility has further fueled the demand for housing in the city.
One of the key drivers of Manchester’s rental market is its vibrant job market, which continues to attract talented individuals from various backgrounds. This influx of professionals, combined with a growing student population, creates a high demand for housing in the city centre.
Stephen Hogg, Head of JLL North West & regional residential UK regions, highlights the fierce competition for housing in Manchester due to its vibrant job market. He expects rents to continue climbing as both new and existing tenants race to secure space in the city. The ongoing development pipeline and regeneration projects like Victoria North are expected to increase the availability of energy-efficient rental properties, supporting the growing demand.
Market Outlook and Investor Opportunities
City centres, including Manchester, continue to show resilience and strength in providing education, employment, and comfortable housing options. As students and professionals increasingly flock back, the market is expected to continue growing. Investors are hopeful that a broader economic recovery across the UK will further boost city centre property markets.
The demand for rental properties in Manchester’s city centre remains strong, with tenants willing to secure properties months in advance. The lettings market is particularly active, with properties in the lower price range being in high demand. The shortage of supply in this segment has led to properties being fully booked within hours of being listed.
Investors looking to capitalize on the rental boom in Manchester can consider the growing market for city centre luxury apartments. These apartments have experienced significant growth in rental prices, making them an attractive investment option.
Conclusion
Manchester’s city centre rental market is experiencing a remarkable boom. The surge in rental prices, coupled with a slower growth in house prices, presents significant opportunities for property investors. With a vibrant job market and growing demand, Manchester’s city centre is set to remain a competitive and attractive location for both tenants and investors.
Investors looking to make the most of this thriving rental market should consider the strong demand for city centre luxury apartments. The shortage of supply in this segment, coupled with the increasing demand from professionals and students, makes it an ideal investment option. As Manchester continues to evolve and regenerate, the availability of energy-efficient rental properties is expected to increase, providing further opportunities for investors to capitalize on this booming market.
Now is the time to explore the potential of Manchester’s city centre rental market and seize the opportunities it presents. With a positive outlook for rental growth and a vibrant job market, Manchester continues to solidify its position as a top-tier investment destination in the UK.
Contact our team today to learn more about property investment opportunities in Manchester and take advantage of this thriving market.
