Rental Demand in Manchester
Rental Demand in Manchester is soaring, it is now reported that nearly 30% of housing in Manchester is privately rented. The market is in high demand and the under-supply of private rented accommodation is expected to rise by up to 40% over the coming 10 years. The UK’s 2nd city, is benefiting from a rapidly growing population, which experienced a growth spurt of nearly 20% between 2001 and 2011, which is the fastest rate of any city in the entire UK. That is a staggering rate of growth and nearly 3 times the rate of the national average. Importantly, for investors considering Manchester as a location for long term property investments, is the changing demographic in Manchester. The number of new generation Y or ‘echo boomers’, the generation after the baby boomers who are aged 20 to 39-years-old, this group coming to the city has risen substantially. Now the number stands at 123,600 living in Manchester compared only 78,301 a decade before. During this generations ‘coming of age’, renting has become more of a lifestyle choice, and a long term housing arrangement. As home ownership is unaffordable many working professionals in this age bracket, renting is the alternative. This age range place a huge demand for an overstretched private rental market, additionally, this generation are highly likely to become a long term tenants. Which is ideal for landlords looking for hassle free properties for long stable long term rental income. The rental demand in Manchester has remained constant, and shown stable growth, annual rents rising 4% from £8,316 in 2014 to £8,628 in 2015, according to research by HSBC. Furthermore, Manchester is home to one of the largest student populations in Europe, with high student retention rates, adding additional competition to the housing market year on year. It is no surprise that more than 25% of Manchester’s housing stock is privately rented. This is the highest figure in the country. Manchester is now a city of renters who are in need of a new modernized tranche of housing stock. As the demand deepens due to the influx of people and business, the demand is not being matched by delivery of new homes. As this trend continues, rental yields will also rise within Manchester. According to HSBC, the rental yields are already the highest within the UK. Rental demand in Manchester soaring and it cannot be fulfilled by the traditional buy to let model, the new wave of build to rent accommodation with high spec finished in town centre locations are in huge demand. No longer can the old accommodation types meet the demand of the current tenant. Purpose-built residential accommodation with all of the new additional amenities demanded by the new build to rent tenant, is projected to be a real growth market. With the sectors anticipated to be worth £50 billion by 2020. There is a real shortfall of modern purpose built rental accommodation to service the Manchester requirement for the private rental sector. It is expected that upon handover of new units over the forthcoming months and years, we will see Manchester become the hub of the new build to let sector, as the demand is more heavily emphasized than any other city in the UK. If you enjoyed this post, click the links below for more: Why Invest in Manchester? Current Opportunities in Manchester UK Apartments rise £1,000 a month since the 2008 crisis Build to Rent, a new property concept for the next generation.