New data from Alliance City Living has shown that Manchester’s residential property market has once again seen rents achieve record levels.In November, achieved rents for 3 bed apartments, studios and houses all grew to their highest ever point – an increase of 21.9% on average in the last 12 months.
2022 has been a somewhat subdued year for the rental market in Manchester and across the UK as a whole. Our analysis shows that it is clear that the lack of supply continues to prevent Manchester’s lettings market from returning to its pre-pandemic levels. Whilst 15,542 homes are currently under construction in Manchester – this is just 347 (2.28%) more than the same time last year.
Each month, Alliance City Living looks at the rental data for Manchester, and compares it to previous years to provide investors and landlords up-to-the-minute insights and trends to help them inform their decisions. The area covered by this report includes Manchester City Centre as well as surrounding areas such as Ancoats, Hulme, Ardwick and Strangeways as well as parts of the neighbouring boroughs of Salford and Trafford such as Central Salford, Old Trafford and Salford Quays.
The number of properties available to rent in Manchester has now recovered slightly from the record lows of August 2022 (360), however, this is still at a year-on-year all time low – and considerably lower than pre-pandemic levels.
During November 2019 in Manchester,1,790 properties were available to let. On the last day of November 2022, there were only 501.This is 30 fewer properties than were available on the last day of the same month in 2021 and the lowest November since our records began.Of the 501 properties available to rent in November, there were 39 studio apartments, 116 one beds, 294 two beds and 52 three beds.
As 2022 draws to a close, it is clear that 2022 is performing below average for the number of lets agreed. So far in 2022, 5,920 homes have been let in Manchester. This compares to 8,142 in the year up to November 2021, and an average of 6,785 for the pre- pandemic years of 2018 and 2019.Our data shows quite starkly that the ongoing rental supply crisis continues to prevent Manchester’s lettings market from recovering to the levels seen before the pandemic.
In fact, November 2022 was quieter than 2020 and 2021, with a total of 394 homes let – compared to 502 in 2021 and 5017 in 2020. Traditionally the holiday period would be subdued, however, this is unlikely to alter the trendline for 2022, and absorption rates will remain lower than previous years.
In the wider market, there has been much speculation over what might happen to house prices in general over the next few months following 9 successive months of interest rate rises. Rightmove’s latest House Price Indexshows that asking prices have fallen2.1% to take the national average asking price to £359,137. This is likely to be due to a level of concern from purchasers around the increase of interest rates, and a reduction of the number of mortgages available on the market.
Rightmove’s report suggest that many potential sellers are perhaps deciding to hold their properties back, hoping for a better offer after Christmas. Some are also reducing prices to secure a quick pre-Christmas sale. There are also thought to be a significant number of people waiting to see what happens with the property market and will make a move in the early part of 2023. This pent-up demand could see the reduction in asking price quickly reversed.
Despite a somewhat sluggish rental market in 2022, rents have continued to rise providing landlords with good returns. Although the overall economic outlook remains uncertain for 2023, the lack of supply of properties due to become available next year suggests demand will continue to be high for the foreseeable future.
If you are looking to invest in the lucrative Manchester property market, then Alliance Investments have a number of exciting properties available to purchase in the city. To find out more, you can get in touch with the team.