Build-to-rent market stabilises in Manchester and Salford
While representing a 55.4% increase over the past five years, the average rent for a new-build apartment in Manchester and Salford remained relatively unchanged over the past 12 months, according to the latest research from JLL.
It is a similar story when it comes to the price of a new-build flat, which rose by 26% since 2020 but only .1% over the past year. Requests by Place North West for the data regarding those exact average rent and price figures were declined.
“Over the last five years Manchester has made itself a more attractive place to work, study and live, which is reflected by the strong sales and rental growth that the city has enjoyed during this time,” said Jonathan Wiedemann, head of the North West at JLL.
“And this shows no signs of changing, with the market remaining steady over the last year. Now it’s important that efforts are made to help increase the supply in the pipeline, helping us to capitalise on this long-term growth and ensure Manchester’s property markets remains an attractive prospect for investors.”
JLL predicts that the next five years will see another burst of growth, forecasting an average sales price growth of 22% in the years to 2029 and 18.8% in rent rates. This will be bolstered by the Manchester and Salford’s current pipeline of 3,960 homes.
The figures come from JLL’s Big Six Residential Development Report, which looks at trends in new-build apartments in Birmingham, Leeds, Bristol, Edinburgh, and Glasgow in addition to Manchester.
Leeds was similar to Manchester in having little growth over the past year in apartment prices and rents, however the other members of the big six all had some increase.
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Birmingham topped the list, with rents increasing by an average of 6% over the past year and prices rising by 5.6% – a trend JLL predicts will continue and ultimately lead to an increase in rents by 18.8% and in prices by 24% for the five years leading up to 2029.
While Manchester’s market remains strong for now, JLL noted that a nationwide slowdown in delivery could have an impact. The report cited increases in the costs of materials and the cost of debt as two important factors. Also: the changes and delays wrought by new regulations, including the Building Safety Act.
The BSA, which has the greatest consequences for buildings of 18 metres in height or taller, has pushed multiple projects back months. The Building Safety Regulator was supposed to deliver verdicts on projects’ designs through its Gateway 2 process within 12 weeks. The median turnaround time for Gateway 2 applications is now 43 weeks, according to the regulator’s comments to Parliament earlier this month.
Marcus Dixon, director of UK residential research at JLL, said: “The slowdown in delivery is most acute in our largest cities, where the proportion of high-rise projects is greatest.
“These delays are adding to the viability challenges already faced by developers, from higher build costs to planning complexity,” Dixon added.
“Without urgent action to streamline the approvals process and unlock stalled schemes, the UK risks falling short of its housing ambitions.”
Is it me but is exponential rental growth that outstrips wage rises a good thing?
By Anonymous
You will all own nothing and be happy..
By Steve5839
The BSA…the most ham fisted, poorly executed, poorly communicated and poorly resourced piece of legislation any Government has introduced. In a time for desperate need for growth the BSR and HSE have a chokehold on delivery.
By Anonymous
Anonymous, I agree completely from today’s renters perspective. I think the problem is that without rental growth viability even in Manchester is impossible at the moment without grant support so the supply is going to drop dramatically over coming years. This will just make affordability in the medium and long term ever harder. The economy is caught between a rock and a hard place here as lots of people are already priced out and yet without rental increase, supply can’t be increased.
By Simon
The price of the appartments in Manchester and the city of Salford area are still not cheap enough for most people in the area.
By Salford Born and Bred.
anonymous @12:30, no rental growth that outstrips wage growth has a negative effect on the local economy by reducing excess income that individuals have. to spend on food, drink and activities. That’s then a reduced income to local businesses that have increasing costs for rent, wages and energy bills. Everyone is poorer.
By Anonymous
I genuinely believe a significant contributor to all of this, particularly in Manchester is international students. Apartments as shown in the picture get put on the market way above market rent and get snapped up by international investors or students. Therefore increasing “market rate” to everyone else.
By Anonymous
Neoliberalism in full flow—transfer all wealth to the wealthy..: there’s no such thing as enough.
By Tom
5.02pm – spot on. The very dramatic growth of international students coming to Manchester over the last five years and an absence of quality PBSA to meet their requirements has seen those students enter into the mainstream city centre rental market. They have the financial muscle to drive rents upwards so that only the very well paid workers in the Manchester economy can afford the rents now being seen in the city centre market, especially in those buildings at the quality end of the market.
By Anonymous
Interesting that some on this thread cite international students as the smoking gun behind higher rents – that would suggest a certain fragility.
By Rich X
There are students everywhere, Deansgate Square has many
By Anonymous
Simply following the London model with similar effects …good and bad.
By Anonymous