Shortage of supply characterises apartment market

Ripon AbdulHomes4u's city centre deputy branch manager, Ripon Abdul, shares his thoughts on the rental market, the availability of properties, and his market predictions for the upcoming six months.

In the last six months the market for apartments within Manchester city centre has, in terms of sales, been relatively buoyant. The availability of all types of apartments for sale within the city remains high. homes4u have had 28 new instructions since the start of the financial year, highlighting that vendors are not being deterred from selling in the current market . However, when looking at rentals, the same cannot be said. The number of properties becoming available to rent each month has been declining. In the last six months we have only had about 100, of an overall city stock of over 500. This can be accounted to a significant number of re-signs, 120 in the same period, and the lack of new developments being released on mass to the market.

The take-up of rentals in the city has been very strong and in the first week of May, nine apartments were let on the first viewing – a sign that whilst stock levels are low, demand is still high.

The demand for apartments for rent in the city centre is huge. In areas like the Southern Gateway and the Northern Quarter, we have seen exceptional demand. Young professionals and students are showing the most interest in the areas – on our database, 350 prospective tenants were looking for a rental property over the last six months with demand, therefore, far outstripping availability.

Where the sales market is concerned, buyers are looking for apartments. Our city branch has registered 100 prospective purchasers in the last six months. Viewings on the available properties have been abundant, but offers have been much lower than the asking price. This could be due to the poor availability of mortgages, and the requirement for higher deposits which has left more and more people unable to buy. However, what has been noticeable is that the higher end of the market is bringing in the majority of viewings and offers, with two bedroom flats over £175,000 proving very popular.

In the last few years there has not been a significant number of apartments built, but recently we have seen three or four blocks that have come on the market, mainly in Ancoats in buildings such as Flint Glass Warehouse, Islington Wharf and Quantum. The majority of these properties have now been let, but the supply on the whole has been relatively slow and most blocks in the city centre are now full. The Cube in New Islington is nearing completion and the only other construction project going on in the city is Nuovo, Great Ancoats Street, and this will see around 150 apartments come to market in the next 12 to 18 months.

The summer is always a busy time of year for both sales and rentals and demand for sales should be particularly strong over the next three months, as with previous years. I am positive that the demand for rentals will remain high and the average time to rent a property will continue to quicken, based on trends over the last six months.

In the first six months of last financial year homes4u had:

  • 45 sales instructions
  • 35 sales agreed
  • 440 lets agreed

In the second six months of the last financial year homes4u had:

  • 24 instructions
  • 9 sales agreed
  • 406 lets agreed

The half-year review is published in association with Crowe Clark Whitehill and Hill Dickinson

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