New research from estate agency Cushman & Wakefield has confirmed that both Manchester and Salford are topping the table when it comes to outperforming the average UK house prices. Robust rental yields are also aiding the property market.
Metropolitan boroughs’ house prices outperform rest of the UK
Over the past seven years up until July 2017, house prices in Manchester have risen by 34 per cent and are up 38 per cent in Salford against a national average of 30 per cent. Both metropolitan boroughs have experienced annual returns of 11 to 20 per cent over a three year period up until July 2017.
Over the next decade northern cities will keep outpacing the South East
The report forecasts that these northern cities will continue to grow ahead of the overall UK market during the next 10 years, gaining momentum from 2020 onwards.
Manchester’s ascendancy driven by vibrant economy and skilled employment growth
Julian Cotton, Associate director at Cushman & Wakefield said: “Manchester’s positive future is underlined by the strength of economic and demographic forecasts. The city thrives on a vibrant and varied economy, driven by an increasingly skilled and large workforce. By 2022, it estimates a significant rise in new employment opportunities, particularly with the professional, scientific and technology sectors set to experience around a 10 per cent hike in their workforce.
“More than a quarter of Manchester’s office space is occupied by established companies working within the legal sector whilst other key areas of employment include financial services, insurance, media, technology and business services. It has a significant number of FTSE 100 companies.”
Rental yields are strong
The report identifies similar trends for the rental market, with rental inflation running at around 2 per cent per annum to 2021, thereafter settling down to around 3 per cent plus per annum.
Manchester benefits from strong investor base
The report highlights that: “Manchester benefits from a strong investor market, with over 52% of the entire housing stock lying in the Private Rented Sector (PRS). Considering the historically high rates of house price inflation in both Salford and Manchester, initial rental yields remain strong at present prices, averaging 5.3 per cent for both areas. This resilience is a clear indication of underlying strong tenant demand as rates of rental inflation come near to keeping pace with house price growth. For those seeking investment opportunities beyond London, Manchester and Salford offer a breadth of choice and healthy returns.”