The four-tower Trinity Islands scheme has been backed by the GMHILF. Credit: via planning documents

Manchester braces for BTR slowdown before 2024 boom 

A strangled supply of build-to-rent apartments over the next two years will push rents up and force would-be tenants into shared accommodation before the next substantial wave of units comes forward, according to research by Urbanbubble. 

Fewer than 500 BTR apartments will be completed in Manchester, Salford and Trafford this year, dramatically down compared to recent years. 

In 2018, 1,685 BTR apartments completed. This grew to 2,242 in 2019, 2,325 in 2020 and topped out at a record 2,641 last year. 

This year, 431 new BTR apartments will hit that market, while in 2023, Urbanbubble predicts 1,457 will be delivered. 

This decrease in output will provide developers within the sector a chance to “examine lessons learnt” after a period of rapid growth since GreenGate – the city’s first BTR scheme – launched in 2016, according to Urbanbubble.

With only 1,888 apartments due to become available in Manchester before the end of 2023, Urbanbubble predicts a “subdued summer lettings period” this year.  

The number of lets secured in the first three months of 2022 is already 30% lower than the first three months of 2021, Urbanbubble reported. 

However, growing demand for BTR homes will be satisfied to some extent in 2024, releasing the pressure on Manchester’s residential market.

“We are already projecting that 2024 will be the most active year for new build-to-rent completions that Manchester has ever seen, with 5,254 completions projected that year,” Urbanbubble’s report states. 

The next substantial wave of completions is due in 2024. Credit: Urbanbubble

In the meantime, strangled supply coupled with growing demand could see rents soar across the BTR sector. 

“With so few new schemes launching until the end of 2023, the market will likely reshuffle and stratify. But with many schemes nearing full occupancy, it is also likely that we will see rents increase,” according to the report. 

In addition, rising rents could see “increasing numbers of people choose to rent bedrooms in shared flats and houses in multiple occupation”, Urbanbubble said. 

While bad news for renters with their hearts set on BTR living, the lack of supply could be good news for the non-BTR rental market, according to the report. 

The gap between rents for BTR and non-BTR properties has closed in recent months. This is driven by a lack of availability of BTR stock and improving standards of non-BTR homes, Urbanbubble claims. 

Average BTR rent in March 2022 was £1,432 a month, reflecting a 10.4% increase over the last 12 months. Meanwhile, non-BTR apartments averaged rents of £1,300 a month, up 14.5% in the same period. 

Rents have risen sharply in the last 12 months. Credit: Urbanbubble

In 2017, the “BTR uplift” – a measure of how much more expensive BTR rents are compared to the overall market – was £260 a month. So far in 2022, the BTR uplift has fallen to £143 a month, according to Urbanbubble. 

While there are concerns about the lack of supply in the BTR market – there are 73% fewer units available now compared to March 2021 – Urbanbubble predicts the number of apartments in Manchester could exceed 18,000 by 2026, up from just shy of 10,000 currently.

However, ongoing issues around inflation and build cost could delay the next wave of apartments coming forward, causing rents to spiral further in the coming years and compounding Manchester’s supply crisis.

“There were lots of fears that Manchester was facing an oversupply issue with all the new homes being built in the city but the data we’ve collected over the last year shows that to clearly not be the case,” said Ed Howe, research and insights manager at Urbanbubble.

“The number of new jobs being created in the city far exceeds the number of new homes being built, and this is forcing rents to record highs, and pushing the availability of homes to record lows. Apartments that are listed on the market are taking just days – mostly hours – to let, and the city clearly needs to be building far more homes than it is currently.”

Your Comments

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Really,? Everywhere I look both huge or low rise apartment blocks are being built or have planning permission. Are we really that short of them after all the years of building. I know Manchester is growing but the shear numbers being delivered is beyond my meagre understanding.

By Anonymous

The issue with some of the new Manchester towers is that while they might look impressive because of their scale they can look and feel oppressive. In Manchester they rise from a landscape of inner city deprivation within the proximity of council housing.

By The Liverpool Romancer

Unluckly aspiring home owners. Prime sites are now owned by institutional investors.

By Millenial

Ah but Romancer what you’d give for just one. And if it’s deprivation how come all the jobs have been created here? Your comment may be understandable in the circumstances but unwarranted in the long run as I’m sure Liverpool too will prosper one day.

By No Romance

When the report says that apartments will be ‘completed/delivered’, does that mean that developments will be opened and readily available to move into those respective years? If that is the case, if 5,254 apartments are to be delivered in 2024, I would be expecting a building boom going on within the City currently, but if anything it just feels as though construction has fell a bit flat? There’s certainly not as many cranes as there have been in years prior. Do others feel this way also or is that just me, perhaps growing accustom to the City Centre?

By Verticality

There are 100s of flats, sorry.. Apartments available for rent already. Just look in the window of every estate agent.

By Bernard Fender

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