How house prices have changed in Manchester over the last two years
Eddison Wells is privileged to have an office in Manchester. As as a Manchester Mortgage Broker we value the opportunity to enjoy a nice walk around Castlefield Urban hertiage park on our lunch break.
Manchester has been one of the UK's fastest moving housing markets over the last two years. New developments like MediaCityUK in Salford, the Spinningfields office quarter in the city centre and the city's major Metrolink expansion have made new parts of the city accessible and vibrant, as well as led to a subsequent increases in Manchester house prices.
Where have house prices grown?
Manchester as a whole has seen significant house price growth over the last few years. Certain areas however have seen highly elevated growth rates. These pockets of prosperity are primarily concentrated to the south of the city centre. Charlton has become very popular in the last few years as professionals move out of the city centre and look for areas offering the amenities, culture and sense of community that they have become accustomed too. Didsbury, and in particular West Didsbury, remains very fashionable and popular with young families.
Closer to the city centre, the Deansgate and Spinningfields building phenomenon shows no signs of slowing down and the Northern Quarter's nightlife and bar culture continues to attract young people. Certain areas of Salford, particularly around the city centre and the MediaCityUK development have also experienced significant house price growth as Deansgate's popularity forces young professionals to look a little further afield in order to get on the housing ladder.
What do the numbers say?
According to Zoopla, one of the UK's leading property portals. house prices in Manchester have increased by 3% in the last year and over a third in the last five years. That's significantly higher than the levels of growth seen in London and the Home Counties, which was once seen as the engine rooms of the UK property market.
This house price growth has led to some issues though. Properties in popular areas of the city such as Charlton and Withington are now increasingly out of the reach of some people who have grown up there. While the city centre has experienced a building boom, construction in these areas is more restricted which has led to a number of supply issues.
What does the future hold?
As with so much else in the UK economy, the future of the Manchester housing market depends largely on the type of Brexit deal the UK is able to negotiate. Much of the demand for new housing in the city centre, particularly student accommodation has come from foreign buyers and there are fears that a 'hard Brexit' deal will cause them to walk away from the UK property market. On the other hand, this might be a boon to young people who are currently faced with years of savings in order to scrape together a deposit for a property in Manchester.
Planning restrictions are another factor that will impact house prices. Whilst the green belt is mostly spoke about in relation to London and South East England, Manchester has one too. This restricts the amount of development that can take place in Manchester's suburban areas. Whilst it might feel like a new skyscraper is popping up every day in Deansgate or Spinningfields, this isn't the case in the suburbs. This has constructed the supply of family housing since the majority of homes being built in these high rise developments are one or two bedroom flats. This restriction means that, even in the event of a property price correction, family home prices in Manchester could remain high for many years to come.
What else is in the pipeline?
The expansion of Manchester's metro link has moved large swathes of the surrounding areas into Manchester's commuter belt. Areas around Wythenshawe and Didsbury are now less than 25 minutes from the city centre on an easy and convenient tram service. There are fewer expansions planned over the next few years but an new link towards the Trafford Centre has just begun and this could give a major boost to house prices in the area once it opens in around 2020.
Manchester also looks set to continue to be the economic engine of North West England. companies are keen to move to and expand in Manchester and that means that many young professionals are looking to rent of buy properties in the area. If London's housing market remains as overheated as it currently is, then it is likely that some young professionals will choose to leave the UK capital in favour of cheaper costs and a higher standard of living in the North West of London. Whilst this would lead to a small drop in house prices in London, it would help to keep thew growth in Manchester house prices on track.
The last two years have seen significant growth in Manchester house prices and that shows no sign of changing in the next two years. The planned developments and the general buzz around Manchester and the North West of England created by the government's Northern Powerhouse scheme and the planned High Speed Two rail link will keep Manchester in the public eye and draw more new people to the city.
From a simple supply and demand point of view, the future of Manchester'h housing market looks bright. The unknown external factor of Brexit and the UK's general economic performance could however, damage its performance and it will be several years before we can accurately assess the impact this has had.
The housing mix could also be a significant problem. The young professionals moving to Manchester today will be looking for family homes in quieter locations in a few years time. Based on current housing development plans, they will struggle to find them and this could lead to a challenging market with an oversupply of small flats and a massive under supply of detached and semi detached family homes.