Despite a backdrop of economic uncertainty, the Manchester rental market continues to perform extremely strongly according to a new data published by Alliance City Living. In their regular quarterly update, the lettings and property management company looked at a number of factors including achieved and asking rents, the number of properties available to rent as well as the number of homes under construction in Manchester across the previous quarter (Q3 2022).
The report shows that rents are continuing to increase at a considerable rate with some areas of the city seeing prices increase by 38% in just one year. The rates have been driven by ever-increasing demand as more and more people are looking to move to Manchester. Despite an increase in supply with more homes starting construction in the city this year than any year previously over the last decade – it is highly unlikely that there will be anywhere near enough rental stock to meet the phenomenal demand.
Demand for rental properties in Manchester is so high that there were never more than 550 properties listed available to rent over the last three months. This number reached an all-time low of 360 in August 2022. Unsurprisingly, properties were let at record speed with many contracts agreed in just a few hours of coming to market.
As a result of this exceptional demand, rents in Manchester have increased to record levels – up 15.3% year-on-year. For the first time since before the pandemic, achieved rents have risen above asking rents on average. This suggests that renters are now bidding higher than asking price when trying to secure their rental property.This is probably a result of the restricted supply and increase in demand for rental homes in the city right now.2 bed homes are showing the largest uplift between asking and achieved rents at the moment. Average asking rents for 2 beds were £1,372pcm in September, while achieved rents were £1,413pcm – a £4.10pcm increase.
There is further evidence that Manchester continues to enjoy a period of significant confidence in its residential rental market with the news that Q3 2022 saw a recorded amount of office space submitted in Manchester for planning. A total of 1.3 million sq. ft. of office space was proposed across 7 schemes. These new jobs will bring with them further increases in demand for homes in the city
Despite the outlook of national economic uncertainty including rising interest rates, the Manchester marketplace continues to thrive, offering exceptional opportunities to investors. You can download the full Alliance City Living Q3 Report here.