Manchester continues to defy economic uncertainty and high interest rates. The city’s population keeps growing and housing supply can’t keep up according to the Deloitte Manchester Crane Survey 2024.
A healthy delivery of more than 2,400 homes in 2023 was roughly the same as the level seen in 2022 and half as many as were completed at the peak in 2021.
The pipeline of properties in construction is equally healthy. Seven new major sites started in 2023 and took the total pipeline to 11,765 units across the city, with just 867 in the most popular city centre area.
This is a lot of construction, but the reality is that Manchester’s population is growing much faster than this. The city’s population increased by approximately 20% in the last Census period compared to the national average of 6.5%, and there are no signs of that growth slowing in the future.
To illustrate how far behind construction rates are, the City Council estimates that there will be a minimum shortfall of 500 homes annually in the years to come. This reality is reflected in Manchester’s rental growth which is far and away the highest among the UK’s top six cities outside London. Research from urbanbubble shows an average increase of 20% across Manchester in the last 12 months.
When looking to explain this exceptional population growth and the effect it is having on housing in Manchester, we can turn to the offices sector. The Crane Survey reports that almost 20% of office space in Manchester set to be completed in the next two years is already pre-let. This is a significant economic achievement for the city and is likely to bring a new wave of young professionals to Manchester once even more high quality jobs are delivered.
Between the strong economic factors and the fact that there aren’t enough houses to go around, we can conclude from the 2024 Crane Survey that house prices and rents are likely to keep going up for the foreseeable future. Consequently, Manchester is likely to continue being a highly in demand location for property investors who can make the most of the opportunity the city presents.
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