27 Sep 2019
In the Manchester Houses, Manchester’s economic development is comparable to some of the leading cities of Europe, and with the growth in population and diversification in the economy, there has been construction growth and infrastructure development where one can see it is one of the fastest-growing cities of UK and Europe. Property price in southern England is undergoing some of the weakest price growth in the last seven-year, whereas, the cities in the north are seeing higher values (as per latest indexes). Zoopla released the average house price growth across 20 biggest cities of the country where it was found, on an average, the price growth in the north was 3.6 percent, at the same time as the demand for homes in the northern cities are keeping pace with the supplies.
Earlier the capital city and the southern cities dominated the housing price growth markets but Manchester in the last two years showed resilience amidst political and economic uncertainties. The overseas investments in the city were highest in the last decade where the city had a surge in interest from Asian and East Asian buyers. In contrast to the housing boom, investors are driving up home price growth and the supply shortage continues to give cover to the investment. The demand is supported by the strong economy, growing wages and lower unemployment rate.
Over one-fifth of the young professional in the city are employed in sectors like financial, professionals and science, and the North-west is the home to numerous manufacturing units, and it is also known as one of the booming tech city outside London. The city witnesses a record level of construction to meet the surging residential property and office demand.
Student accommodation demand in the country
UK student housing demand continues to grow where the analysis on students find the number of students applying to the different courses offered by the local universities continues to increase in comparison to the previous years. It is believed the number of students in the country will continue to grow and there can be long-term demand for student accommodation. On analyzing the ONS population projection, it was observed that there can be about a 15% rise in the number of full-time undergraduates till 2030, and the number can increase to 220,000 by then.
According to the data - 560,000 students have been applying to full-time undergraduate courses for the current year 2019 – 2020, and there were almost 2,500 applications made at the same point in 2018. There has been a rise in the number of applications in the last 3 years, driven by the growth in the number of international students applying for different courses in the universities.
There has been a growth in the number of applications’ from the international students where 33.3 percent y-o-y rise in the number of students from China was seen, as the number increased to 15880. Further, there has been a growth in applications from other countries like the US, India, and the UAE. Despite economic and political uncertainties, the student population in the EU continues to increase by 1 percent.
Manchester house student accommodation
Manchester is one of the regional cities witnessing a boost in student population due to the presence of four universities and 14 higher education institutions. The population of the city grew at the rate of 6 percent a year since 2015 as per the Manchester City Council reports of 2018 (State of the City Report) and 65 percent of the graduates from the universities of Manchester continue to stay back in the city. Besides, 36 percent of the students who were studying in other regions returned to the city after their graduation. The growth in student population raises the need for Manchester house student accommodation in the city, which has been predicted to grow more with the new buy-to-let investments. This category of investment provides lucrative opportunities as the Manchester house prices are predicted to increase at the rate of 57% till 2028.
The number of student applications, the purpose-built accommodations, and demand for general accommodations is expected to grow in the coming years. It was found that between May and August 2018, 30% of full-time first-year undergraduate students lived in the privately-owned purpose-built student homes which indicate a growth of 22% in the last five years.
The private sector continues to see a growth in the Manchester house student accommodation and it is assumed that over 36,000 new beds may enter the market while the demand is still growing.
Even the city like Birmingham is predicted to get a growth in student housing demand where approximately 40 percent of the population is less than 25 years and it hosts one of the youngest crowds in the European cities.
Growth in population, investment inequalities, and HS2 delays
The growth in population also raises the demand for better transportation and infrastructure, and the Greater Manchester Combined Authority has announced the expansion of the metro link. By 2037, it is expected that the region will have more than 200,000 new homes as the population of the city by 2025 is expected to rise to 644,100.
Recently, the parliament announced that the first phase of London to Birmingham HS2 was pushed back and the project could be delayed by over 5 years until 2031 and the government had to make such as decision because the cost of the project soared by £88bn. The transport Secretary Grant Shapps said the full Northern section of HS2 to Manchester and Leeds would be pushed back by 7 years to 2040, mainly, due to the growth in the expense on the projects.
Shapps said the official budget figures have been misconstrued and understated related to the actual cost and its benefits. The Labour accused the government saying that this was one of the bad news which will hit the UK transport system, especially, the North.
The research by the Labour party claimed that about 10 percent of the Londoners held more wealth than the whole of North-West and this created a huge wealth inequality in the country where the divide between the South East & London and the rest is widespread.
The figures released by the Office for National Statistics finds some 10 percent richest people in the capital city hold more wealth than the whole of Scotland and Wales, and they hold three and half times more than Northern East. The opposition is against the concentration of wealth that leads to unaccountable power and corruption. Low investment outside London also shows the other areas are held back, largely, due to the policies of inequalities, which has been hitting the Manchester house prices as well.
Manchester houses for sale - Affordable homes schemes
The city is, mostly, about migration, education industry, and incentives. The residential business was once dominated by amateur landlords and in the North West, Manchester is like London in England. Multiple different housing options are being introduced to resolve the problem of growing Manchester house prices.
To address the recent rental affordability problem co-living approach was introduced for the private sector by Goldman Sachs iQ Student Accommodation that aimed to developed such dwelling places as it believed the rental market was one alternative to the bond market as the yields have turned negative, in the recent year, in the bond markets, and money that was invested in bonds is now being diversified into other areas like real estate which, principally, include the student accommodation, due to the growing demand in the cities. Co-living housing was offered as the average rents increased 75% in the last 10 years to 2017, and in a decade, over 26,746 renters entered the market, while, the average salary in the city as of late 2017 is £21,500.
The planned co-living project offers bedrooms and shared communal spaces for people. This trend is common in American cities with limited dwelling space and growing population. Although it has been criticized and considered overpriced and small, despite the fact, due to higher volatility in the market, the world’s largest financial player is looking for a substitute in the landlords’ business.
Is This House In Manchester The Messiest In Existence?
The House of Fraser Manchester
In 2016, the Kendals store was bought by private investors as it was described as one of the institution and art deco, which was a treasure of the city architecture. The house of Fraser Manchester employed over 500 staff. Last year the landmark department, the 182-year old House of Fraser was set to close as Mike Ashley’s Sports Direct bought the place out of administration and failed to meet the new rental terms set by the landlords. Ashley bought the 59 store chain for £90m and tried to keep the business running and offered rock bottom rents for some.
Earlier the administration citied a £40m rent bill on the building and Sports Direct claimed they were renegotiating the rent with the landlords across the country while in September last year they claimed some of the stores were safe and some were set to close. Ashley blamed a group of greedy landlords for the expected closure of the house of Fraser Manchester and the store was understood to cost over £4m each year in rent.
It was later saved from closure and new rental terms were renegotiated on the Deans gate building. Last year a deal was finalized where the Manchester City council played a role in saving the Manchester icon and the jobs at the house of Fraser Manchester. The Kendal’s deal shows the landlords, retailers and local authorities can together work to make a real difference in the high street.
Is there a housing bubble in Manchester (UK)?
Strong demand for housing with the shortage of supply has been creating growth instead of speculative buying. Speculative buying refers to purchases made to sell for profit. It played a key role in the housing crisis in many global cities but the recent housing price index show housing demand in the city is mostly from people who planned to live in their home.
Manchester house prices are not just driven by real estate investments. While there is a clear imbalance in the demand and supply of homes in the southern cities of UK, the northern cities are not facing the risk of the housing bubble.
The study by Zoopla finds the northern cities are still more affordable than southern as compared to average household income, whereas, the buyers face the problem of unaffordability in the south where the prices are too high in comparison to earnings. Also, the buyers find the cities within easy reach of Manchester like Wigan and Oldham more affordable where the growth in housing stocks is adequate for buyers and these regions are located within the commuting distance of London to fulfil the demand.
Some of the most powerful and positive markets in the north include Liverpool and Manchester which are enjoying a strong growth in supply and demand, that helps to restore the balance, while, London continues to be one of the most expensive cities where the average price is £484,200. The majority of cities, which are having growth less than 1 percent, belong to the South.
Will house prices in Manchester become like London's?
As per RICS except south, virtually all parts of the UK had an uplift in prices over the last year and strongest returns may be provided by the properties in the North West, West Midland and Scotland. It says the new buyer inquiries are virtually unchanged and there was not as such a decline in buyers’ demand in the first half of the year, but sales continue to slip, on the other hand, sale expectations for the next quarter are expected to remain consistent.
In April 2019, 27,370 new first-time buyer mortgages were completed, which was 7.9 percent more in comparison to the same month of last year. RICS claims Manchester continues to be a seller’s market, while, some parts of Liverpool are now becoming the buyer’s market. The property site Zoopla states the new supplies in these markets are in line with the number of sales and this indicates strong growth in Manchester house prices.
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