Demand for city centre living has driven a 13% year-on-year increase in the volume of sales completed by the Manchester residential team at property consultant JLL in the first quarter of the year.
A total of 136 sales were completed in Q1 compared with 118 in the same period in 2014, and the increase was accompanied by a 3.4% rise in the average price per square foot to £243.
Average rental values in the city were up by 8.2% and have now reached £920 per calendar month.
Stephen Hogg, lead director of regional residential in Manchester, said: "We'd normally expect capital and rental values to fluctuate on a countercyclical basis. The fact that both are rising simultaneously demonstrates the impact that the high demand for the small numbers of available homes is having on the market.
"The situation is set to continue until this issue is addressed, however it has also put Manchester firmly on the map for investors and developers. Our research has shown that 12 new residential towers are in the city's development pipeline, adding to the existing stock of 18 schemes larger than 20-storeys. Outside of London there are only two other developments of this scale in the pipeline – both in Birmingham.
"The level of development we're seeing in Manchester is clearly a vote of confidence in the city, but there's still a significant way to go – 9,000 new homes are now needed every year to cope with the level of demand it's experiencing."