Manchester Report

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Supply The Local Plan has established that the city centre will be the focus of housing development in Manchester and it is expected that a minimum of 16,500 new homes will be delivered between 2010 and 2027, equating to 917 homes per annum. However, the supply of new housing in recent years has been low for a city the size of Manchester and compared to pre-global recession years. Between 2009 and 2014, total housing stock only increased by 3%. While annual completions have averaged 1,674 over the past decade, in the last three years the average drops to less than half of this number. This suggests that supply may struggle to keep pace with anticipated future demand. Figure 3: Manchester residential completions 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total Private Source: DCLG Note: 2015/16 only includes data for the first three quarters Prices Values have recovered much of the lost ground following the global recession fallout but are still 12% below the ten-year market peak. Annual price growth to March 2016 was 7.4% according to the Land Registry, ahead of the North West regional average (+5.3%) and the national average of 6.7%. Figure 4: Manchester average residential sold prices: 2006-15 £120,000 £115,000 £110,000 £105,000 £100,000 £95,000 £90,000 £85,000 £80,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Land Registry 6
Yields Current gross initial yields are higher than in many other large cities in the country, and considerably better than those on offer in London. Rental growth prospects are also strong, given the projected growth in household numbers and the likelihood that supply will not keep pace with demand. Figure 5: Gross initial yields: 1-bed flats Central London 3.7% Bristol City Centre Cardiff City Centre 4.5% 4.7% Newcastle City Centre Birmingham City Centre Sheffield City Centre Leeds City Centre Manchester City Centre 5.7% 5.9% 6.0% 6.3% 6.7% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Source: Zoopla & Chestertons Research Figure 6: Gross initial yields: 2-bed flats Central London 3.2% Bristol City Centre 4.3% Birmingham City Centre Liverpool City Centre 5.5% 5.9% Leeds City Centre Sheffield City Centre Manchester City Centre 6.4% 6.5% 6.5% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Source: Zoopla & Chestertons Research 7
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