It’s far from ‘Grim up North’ as Manchester becomes a UK property powerhouse placing second among UK cities for price growth
After the recent visit to Sci-Tech Daresbury, in Warrington by Prime Minister Theresa May and a pledge of a £556m cash boost for the North, things are continuing to look positive for the North West of England. The UK government’s decision to boost economic growth in the Northern England coining the term ‘Northern Powerhouse’ looks to have benefited Manchester the most – at least when it comes to property price growth. But, it’s not only Manchester where property prices have performed well, other cities within the region witnessed strong growth and the UK government’s commitment to the North of England will undoubtedly continue this trend.
The narrowing of the North/South Property Price Gap
Some of the factors contributing to the narrowing of the historic gap between Northern England and Southern property prices are the adoption of technology allowing more people to work remotely, ultra-low interest rates keeping mortgages affordable and probably the main factor, lack of supply. With high numbers of buyers returning to the market, particularly in the first-time buyer segment, affordability is what is making the North of England so attractive. This becomes more obvious when one considers that a typical home in London is worth more than 14 times local earnings, while for Manchester, this drops considerably to 6 time local earnings plus the added benefit of healthy price growth. Rising demand for Manchester property amongst Chinese investors has also added momentum to the property market with enquiries up 50% according to reports in the Telegraph this month.
According to the latest index data from Hometrack, Manchester placed second among UK cities for price growth at 8.9% in 2016, its fastest pace of increase since July 2005. Growth seen in Manchester was only just behind that of Bristol, which saw prices rise by an average 9.6%.
This doesn’t take into account the final quarter of the year when Manchester property prices increased by 2.5% ahead of Bristol’s 0.7%. If this trend continues in 2017, Manchester could become the number one city in the UK for price growth.
By comparison, London fell to 7th place among UK cities with prices rising 7.3% in the same period. Rising earnings in Manchester combined with low mortgage rates have helped increase demand for property in the city and with supply struggling to keep pace with demand property price growth has accelerated.
Although Manchester property was already showing strong performance over a number of years prior to Mrs May’s visit, the reaffirmation of the pledge by the UK Prime Minister will undoubtedly be more welcome news for property owners in North-West England.
Aberdeen property in reverse gear
Around the UK it was only Aberdeen in Scotland seeing a negative growth in property prices with Hometrack reporting a drop of 3.2% following a major slowdown in the offshore oil and gas sector and a substantial fall in oil prices over the past couple of years. The numbers from the Halifax read even worse for the Aberdeen property market with their data showing a 6.9% drop in 2016 compared to the previous year.
Hot-Property in Manchester:
Residential Estates are currently offering investors an opportunity to take advantage of the current market conditions in Manchester, with a fully managed investment that comes with a 6% rental guarantee. Halo is a development consisting of 66 luxury one, two and three bedroom apartments in the centre of Manchester close to Victoria Station and within walking distance of bustling shopping centres, Harvey Nicholls and Selfridges.