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News Release

Manchester

North West Housing Shortage Looms

Manchester city centre apartments demand now set to outstrip supply


Manchester, 8th September 2011 - A significant shortfall in housing supply relative to projected demand is likely to put upward pressure on North West housing prices, according to Jones Lang LaSalle’s 2011 Northern England residential report.

Northern England’s economy is forecast to grow by an average of 2.4% pa over the next five years, and over the same period, there will be a net increase of 200,000 jobs.  Between 2013 and 2033, almost 21,500 new households pa are expected to be created in the North West, and in Manchester city centre alone, that figure will be 2,800, an increase of 25%.

From 2007 until the final quarter of 2010, the North West, which has historically delivered the greatest amount of new housing in northern England, has seen the area’s highest peak to trough fall of 55%.  In Manchester city centre, units at only a few new apartment schemes are being marketed:  Eastbank in the Ancoats and New Islington part of the city, MediaCity UK in Salford Quays and Nuovo on the edge of the Northern Quarter. 

The shortfall in Northern England caused by the growing gap between demand and supply looks set to prevail over the next 20 years or so, “widening to crisis levels” and putting upward pressure on prices, especially in the medium term.  In the North West, there has been a 7% pa rise in average prices over the last 10 years.    While the Manchester city centre apartment market shows only a 1.3% rise in average sale prices since the second half of 2010, rental values have increased strongly by10% in the year to the second quarter of 2011.

Jones Lang LaSalle’s director of north agency and development, Steve Hogg, oversees two residential estate agency units in Manchester which handle the largest single share of available properties on the market.  Currently they are advising on circa 1,000 apartments.

Steve adds:  “With the North West set for a challenging few years, it will be interesting to see how developers adapt to the changing residential landscape.”

“In addition to the three main residential schemes being marketed now, there are only two new sites coming through to satisfy demand for the city centre those being Nuovo with 112 apartments in the Northern Quarter and Lend Lease’s Cypras Place at Green Quarter.

With the current rate of sales and rentals, this only adds up to between one to two years’ supply before we have no new stock to offer the market.  So the message to developers really is ‘let’s have some more!’

“The Salford Quays market is performing strongly as well with Media City making a real impact on the residential scene there. We have achieved six sales there in August at The Heart and Number One taking sales this year to in excess of 50 units and relocating BBC staff and others associated with Media City are snapping up the available rentals so supply is now dwindling.

“This is a very different outcome to that which the pundits predicted two years ago.  Yes, of course, it is still difficult to get a mortgage in the first time buyer market, but that is fuelling the very healthy rentals rate.  Manchester’s attractions as a place to live, work and study for a national and international audience strengthens its residential market and that will always be the case whether that is city centre or suburban demand.”