In terms of economic growth and employment, Manchester is experiencing one of the biggest transformations in its history, according to industry experts.
Manchester is experiencing one of the biggest transformations in its history, according to industry experts, in terms of economic growth and employment.
Traditionally centred around London, the strongest growing areas of the UK property market are now being found elsewhere. An increasing number of investors are being drawn to these exciting new areas that have the potential to leave London property in their wake.
A key driver for this relocation of property investment is the economic resurgence being experienced in the UK with several cities in Northern England expected to outperform London.
The city of Manchester is expected to have the highest Gross Value Added growth and employment gains out of any UK city – including London – from now to 2021. In EY’s latest regional forecast report, it was revealed that Manchester’s employment growth will lead the city league tables at 1.2 per cent a year, the equivalent to 16,300 new jobs. As a result, property prices in Manchester are forecast to experience strong growth, outpacing anything found in London.
Manchester is predicted to be the strongest performing city in the UK with 2.4% GVA growth and 1.2% employment growth per year between 2017 and 2020, with Manchester outpacing the average regional growth.
It’d be wrong to talk about growth and employment in Manchester without talking about NOMA. NOMA is an £800m development in the north of Manchester, creating a mixed-use site that hosts residences, businesses and transport links. This is the biggest development of its kind in North West England and covers 20 acres of prime urban real estate, designed to provide a vibrant and authentic destination for working, living and enjoying life.
With an increase in jobs comes an increase in population. In response, several major Northern Cities are experiencing significant residential construction surges to meet this demand. Looking again at Manchester, this city is expecting more residential delivery in the next three years than the entire previous decade with 14,480 residential units currently under construction.
Such sharp increases in rental demand are widely expected to stimulate rates of capital appreciation for these properties. Rental demand is a crucial metric for property investors to monitor. For instance, in Manchester, employment is estimated to grow by 1.4% per annum from 2019 to 2023 while the city’s population expands by 1.1% a year. As a direct result, experts are forecasting house prices in Manchester to increase by 15.9% over the next four years.
This house price forecast couldn’t be more different to London. A recent survey forecast London house prices to fall by 2.5% in 2019, remaining stagnant in 2020 before returning to timid growth the following year. All in all, London house prices are expected to experience compound growth of only 4.5% by 2023.
This exponential growth that Manchester is experiencing, in both employment and property developments, is the main factor driving investors from around the world to Manchester. Even more now considering the drop in value of the British pound, making it much more lucrative investment for those outside of UK.
As the statistics show above, it really is thriving in the north of England.
To discover more about growth, employment and the property investment market in Manchester, download our investment guide.
Sources – EY Regional Economic Forecast 2019, Deloitte ‘Crane Survey 2019’, JLL: ‘Northern England: Residential Forecasts’ February 2019, Savills ‘Residential Property Forecasts’ November 2018