Regional insight – Manchester

Manchester has a lot going for it, and so what impact is this having on the city’s housing market?

The gap between property values in the south and north of England has increased by £24,000 in the last year alone to reach a record high of almost £169,000, according to the Nationwide Building Society.

But with the findings from the latest house price indexes suggesting that momentum behind the housing market recovery is rapidly shifting from the south towards northern cities, there is one region that looks set to lead the northern fight back: Manchester.

With an overall average price of £162,814, Manchester, which recovered from the recession a lot quicker than the other cities in the north, has rather lot going for it – a new BBC Media City, a major extension to the MetroLink tram system, expansion of the local airport, a new trendy Northern Quarter, not to mention the fact that it is at the centre of plans to create a Northern Powerhouse.

Like most places, there are regional variations across Manchester, with the most expensive homes found in the city centre.

Trafford and Stockport have been among the areas to record the greatest level of capital growth in Greater Manchester, supported by a strong local economy.

It remains unclear at this early stage of her premiership what Theresa May has planned for Manchester. But the government, led by David Cameron, has already put in place plans for a Northern Powerhouse, led by Manchester, to rival London and the south east as the main driver of economic growth in the country, with plenty of international investment for the project, most notably from China, already secured.

Crucially for those thinking of investing in Manchester’s housing market, there is an important young professional scene in the city, with more 25-29 year olds in living in the region than anywhere else in the UK.

With house prices in Greater Manchester starting from under £100,000, the cost of acquiring property in city remains relatively affordable, and yet salaries are only about 30% lower than in London, with unemployment levels in Manchester falling.

Significant growth in the local jobs market, a young population, and a strengthening domestic economy have resulted in a sharp rise in property prices across parts of the region in the past couple of years, and the signs are that they could appreciate further in the short to medium term.

From an investment point of view, buy-to-let investors could expect to achieve gross rental yields of 7-11%, compared with 3-6% in London.

Significantly, Manchester is home to around 100,000 students, making it one of the largest student cities in Europe, with many students opting to carry on living here after they graduate, as well as graduates from other areas moving to Manchester.

With so much happening in the city, including a huge amount of redevelopment, Manchester was recently named in a survey as one of the best places to invest in UK property right now, with solid property price growth looking sustainable over the next decade, supported in part by a growing population.

Consequently, there are lots of new homes currently being developed to meet growing demand with plenty more residential properties in the construction pipeline.

Despite recent political and economic events, the future looks bright for Manchester’s housing market.