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News Release

Manchester

City centre rentals accelerate with central Manchester “a brighter beacon” for price growth next year


Manchester, 3rd February 2012 - The Manchester city centre residential market will see rental levels increasing at ‘an accelerated pace’ in the next few years as strong demand continues  supplemented by frustrated would-be  buyers as lettings supply remains highly constrained. This message is underpinned by  economic forecasts  by Jones Lang LaSalle that Manchester is set to outpace both the North West and the UK  in output and employment terms over the next five years.

Speaking yesterday at Jones Lang LaSalle’s Residential Market Forecast seminar in ManchesterJon Neale, Director, Residential Research said that the city’s rental growth could easily be stronger than last year’s prediction of 6 per cent with growth of 3-5 per cent per annum thereafter above the UK average. “The shift towards renting will continue and private professional investors will become increasingly important and command a larger share of new and second-hand home purchases.  In short, ‘Buy to Let’ finance will be key.

“Central Manchester will be a brighter beacon of light with price growth pretty strong from 2013 as an improving economy and greater demand meets perennial undersupply.“

Stephen Hogg, Director, Northern Residential added: "First time buyers continue to struggle to find  deposits to enable them to gain a  footing on the property ladder and as a result we are seeing a fundamental transformation of the residential market.  Whereas historically,  households have moved out of the rental sector and into home ownership prior to starting a family many now remain within this sector, relocating into larger rental properties.

“With the over 50s holding all the cards in relation to locked capital in their homes, then tax breaks on the release of this equity when purchasing homes for their children would provide deposits for first time buyers and an added boost to the house building sector.”

Given the slightly weaker economic prospects for the North West as a whole, Jones Lang LaSalle expects the housing market to marginally underperform the UK with house prices falling during 2012 but the decline of circa 1.5 per cent will be lower than the average across all midland and northern regions.  North West house prices are set to rise from 1 per cent per annum in 2013 towards 7 per cent per annum by 2016.

Concluded Stephen Hogg: “In the short term, developers are unlikely to return to the market en masse. With the first time buyer market particularly restricted and likely to remain so for a number of years, residential development looks set to stay well below pre-credit crisis levels throughout the next five years.  The steady increase to circa 12,500 completions a year by 2016 in the North West will still be around 40 per cent below 2006/7 levels.”