Manchester records the highest property price growth in the UK!.
Property prices in Manchester grew at a whopping 8.8% in the last 12 months!
According to latest figures, Manchester and Liverpool and other Northern cities are recording good levels of growth currently, this article looks at some of the reasons why and goes in to detail on the figures the regions are growing by currently.
Property prices in Manchester grew at a rate of 8.8% in the 12 months preceding February 2017 compared to 5.6% recorded in London. So why exactly have property prices in Manchester risen as quickly as they have? and what are the key factors driving the growth in Manchester?
Supply v Demand
Perhaps the biggest reason for the recent surge in Manchester’s property prices comes down to supply v demand. At present, the population in Manchester is growing 15 times more than the rate of property supply. Stagnating levels of housebuilding and the increasing population mean property prices in Manchester look set to increase dramatically over the next 5 years. Between 2015-2016 only 290 houses were built in Manchester City Centre when in contrast the population grew by over 10,000 to 530,000. Manchester’s property supply shortage has been identified as being one of the worst in the UK.
Employment growth is a good indicator of economic health, and Manchester’s employment is at 3.8% which outperforms some of the world’s leading capital cities including Paris (1.7%) according to Manchester Evening News. Greater Manchester’s economic growth has been driven by the large-scale and rapid expansion of the service sector, particularly financial & professional services. This sector accounts for a sixth of employment, a fifth of GVA and businesses, and contributed 45% of all GVA growth across Greater Manchester between 1998 and 2008. Manchester GVA of £56 billion makes the city the largest functional economy outside of London.
Forecasts are for private sector growth in Greater Manchester to outstrip growth for the UK as a whole, and for the public sector to suffer less of a contraction here than nationally.
For many years now the Northern cities have been starved of government funding with most of the funding being ploughed into London and the South. A few years ago, that all changed and Manchester City Council were the primary beneficiary of the government’s Northern Powerhouse initiative, an initiative set to invest £150bn into Health, £13bn into transport and £45bn into schools in the North of England. Regeneration is crucial to this city’s growth, and there is not one part of the city where signs of regeneration is not evident. HS2, the new fast speed train line is a fine example of this. With regeneration comes a stronger economy and with a stronger economy comes more property price growth.
The Rise of a Technological Giant
A little-known fact about Manchester is that across Europe, Manchester is ranked second regarding the growth of digital businesses. The city currently has approximately 85,000 employees in this sector, a sector that is powering the local economy. The region’s tech scene has a £2.2bn output and Investment bank GP Bullhound last month reported that the North of England alone now has 11 tech companies valued at more than $1 billion – more than in some other thriving European cities in Sweden and Germany.
A Hub for doing Business
Leading on from the point above, In a 2016 study Manchester was ranked as the number one destination in Europe for the cost of doing business. All you need do is cast your eye around the thriving businesses in Manchester, walk amongst the plethora of independent shops and bask in the limelight of the growing MediaCity to know things here are changing. Some of the reasons why so many businesses are relocating to Manchester and why there have been so many start-ups in the area are:
- Resources Manchester has access to a supreme source of talent, some of which comes from the city’s 100,000 student population, many of whom stay on in Manchester to begin their working careers. The cost of living and business overheads also draw a lot of talent to the area
- Creativity As London prices drive out creatives and start-ups, the relatively low cost of living in Manchester, coupled with its lifestyle and cultural pull draws in those with big ideas and smaller budgets. Manchester is a creative and digital businesses hub, where talent congregates and communities shares ideas and inspiration
- Support Manchester’s flourishing start-up scene has led to local and national government increasing business support and investment in the area. The British library has launched a Business & IP Centre, and the Manchester Central Library created a centre to support entrepreneurs across the North West with space, resources, and workshops. There are various investment funds, loans, and schemes available to give new and small businesses a better chance and to provide them with the nurture they need.
There is no doubt that Manchester is fast emerging as the UK’s second city and is beginning to make its mark on the global scene, things are only likely to develop further in Manchester and in our opinion; eventually, property prices in Manchester will begin to rival those in London.