In a rental market that is already greatly competitive, the latest data from JLL’s Big Six Residential Development Report presents an eye-opening statistic: Manchester has witnessed a staggering 19.6% annual growth in rent prices, significantly surpassing the national UK average of 14%. With the current average rent for a one-bedroom flat pegged at £1,225 per month, these figures show just how popular the city is, even in a highly competitive market.
Leading the Big Six
The Big Six report by JLL analyses the trajectory of housing prices and rents in Birmingham, Bristol, Edinburgh, Glasgow, Leeds, and Manchester. In terms of annual rental growth, Manchester has outstripped all these cities, followed closely by Edinburgh at 18% and Birmingham at 17.9%. This makes Manchester not just a Northern powerhouse, but a leader among the UK’s major cities in rent hikes.
And it’s unlikely to stop here; as according to RICS, Manchester’s rents are likely to continue to rise over the coming months.
Underpinning Factors: Population and Employment Growth
This dramatic increase in Manchester rent prices is chiefly ascribed to a surge in population and a buoyant job market. According to JLL, the city has seen its population grow by 9.7% over the past decade, fuelled by a 28% increase in employment opportunities.
Steve Hogg, the head of UK residential regions and North West at JLL, remarks:
Manchester continues to attract a significant amount of inward investment, students, and young professionals.
Manchester’s diverse makeup also includes one of the largest student populations in Europe. Around 96,000 students are studying in Greater Manchester, of which around 17,500 are international students, which also contributes to the high rental demand in the city.
Supply Shortfall: What Tenants Want
Despite the quick pace of homebuilding, supply continues to lag behind demand. The mismatch is further exacerbated by the ending of the Help-to-Buy scheme and rising mortgage rates.
The report also demonstrates the increasing rental growth rate of three-bedroom homes—33% compared to one- and two-bedroom homes at 25% and 14%, respectively.
It’s worth mentioning that this dearth of supply isn’t exclusive to Manchester; it’s a national issue. Marcus Dixon, JLL director of UK residential research, has called for government intervention to revitalise the market. New builds are slowing down, and fewer landlords are entering the market, leading to a heightened sense of urgency for policy action.
While booming rent prices in Manchester signal robust economic activity and the city’s desirability as a living destination, it also raises questions on affordability and market sustainability. However, one thing is certain; Manchester will continue to be a popular place to call home for renters for many years to come.
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