The UK housing market is at the forefront of national news once again this month as mortgage rates and house prices take up much of the conversation about the overall economy. While some are wondering whether mor uncertainty is on the way, we take a look at one aspect of property which continues to provide clarity – the rental market.
The latest data from Zoopla shows that rental growth in the country remains in double figures as of June 2023. The UK average 10.4% increase year-on-year is the latest sign of health that should help investors plan for the future.
There is no sign of the country’s supply and demand imbalance being solved with building rates largely at the same level as always and the available supply of homes 33% lower than the five-year average. With that in mind, it seems likely that rents will continue growing over the second half of 2023 as homes become harder and harder to find for many renters.
This is the context which explains why rents have reached their highest level for a decade or more. Can this growth continue? At some point we will reach a point where wages cannot keep up, and then we will see a slight flattening. Zoopla analysis predicts that this will occur towards the end of 2023 with approximately 8% annual growth by the end of the year.
Richard Donnell, Executive Director at Zoopla, says: “The cost of renting is at its highest for a decade with emerging signs of stress for some renters, especially those on lower incomes. Boosting rental supply is the key policy lever to support a healthier and more sustainable rented sector.”
However, it must always be noted that even slightly slower growth than we are seeing at this exact moment will keep rental prices at historic highs. In the meantime, the traditional busy summer season is sure to make 2023 a positive time for landlords.
One of the main beneficiaries will be investors in Manchester – a city which is well known for being a strong property investment location and has much more to come in the future.
The city’s year-on-year rental growth as of June 2023 has reached 13%, the highest figure in England outside London. It is also approximately 3% higher than the North West as a whole which has been one of the UK’s strongest regions for rental growth for many years.
This positive outlook matches the latest data on Manchester from Alliance City Living which further demonstrates why now is an ideal time to buy Manchester investment property. Rental prices in the city have continued increasing across all property types, with the most success being seen in the city centre luxury apartment market.
Investors in property like this can benefit from the following growth:
Studios – Average rent £960 pcm, 16.3% increase year-on-year
One-bed apartments – Average rent £1,061 pcm, 10.3% increase year-on-year
Two-bed apartments – Average rent £1,417 pcm, 9.6% increase year-on-year
Three-bed apartments – Average rent £2,403 pcm, 30.6% increase year-on-year
The UK housing market is in good shape, and rental property in Manchester has never been more appealing thanks to market-leading growth and a shortage of available supply.
Developments like Vision and Berkeley Square which enjoy fantastic city centre locations and can offer a high level of luxury are set to be extremely popular in a market which demands new housing of this type. For those looking to invest in Manchester off-plan apartments, these buildings offer an outstanding opportunity to expand and develop your portfolio.
Ronald Garret, Managing Director at Alliance Investments, says: “Manchester is one of the strongest property markets in the UK and the latest rental figures show why it should be a location of interest to all investors.
“There is not enough property to meet demand, and landlords can make the most of this by investing off-plan and getting ahead of the game.”