Manchester Rental Trends
City Centre living has been under a lot of pressure in the last 12 months, with many outer suburbs and houses becoming much more popular. Demand for space and regeneration area’s being two major influences in this trend. However, in the latest market update, we have seen very little availability for rental properties and a record high in rental values throughout Manchester. Signaling a strong bounce back from the pandemic.
Manchester has seen consistent growth now for several years as a significant number of companies have moved from London, causing the city’s population to grow by 50,000 since 2012. The talk around Manchester in the last few years has been that the market is saturated and there are too many new builds, hence why many investors have thought they missed the opportunity to invest. As of September 2021, there were only 427 available apartments to rent in Manchester, a record low, down 79% compared to September 2020. Market activity in the city is now exceeding pre covid levels by some margin. Despite the high levels of residential developments being built over the last few years, the market is highly absorbent with demand heavily outweighing supply as the is the lowest availability on record for Manchester.
Several factors are contributing to these record figures. Students returning to the city this autumn has caused an influx of 100,000 people searching for places to rent. Manchester is growing in popularity competing with London, every year more and more students study in Manchester because of the diverse opportunities it presents for employment. As many people now have the option to work from home and only spend a couple of days in the office, a lot of applications for tenancy contracts have been from London (30%), people looking to work remotely and somewhere more affordable, such as Manchester. Several years ago, the only desirable place for workers to live in Manchester was Deansgate. However, with substantial investment in areas such as Salford, Salford Quays and East Central, prospective renters now have the option to move out to these well-connected areas. Providing desirable alternatives for renters looking to get more for their money.
Rents across the city are rising to record levels across the board. The largest increase in demand has been across the sub district profiles as the knock-on effect of media city and other regeneration schemes kicks in. Over the last five years, the difference in rent between desirable locations and the suburbs has decreased dramatically. Regeneration playing a major part in this as workers now have the option to work further out from the city centre or take advantage of the improved transport links.
We are confident that the rental market in Manchester is going to continue to grow. In 2021, there was over 900,000 sq.ft. of additional office space submitted for planning permission as well as the 2 million sq.ft. of space entered in 2020 (the highest amount on record). Despite the pandemic bringing a lot of uncertainty over how city life would move forward, the bounce back from Manchester has been exceptional. Manchester’s continued investment has helped retain students after university with the ever-growing opportunities presenting themselves as well as offer new opportunities to workers from the south wanting a more affordable city life compared to London. If demand for this magnificent city continues its current track, the pressure on new housing developments will become even worse. There is a clear lack of supply forcing renters to suffer from a lack of availability across the market. The market outlook for potential investors should indicate the direction Manchester is heading in becoming a global powerhouse city, firmly on the map.