House prices in city set to soar 26.4% over five years

HOUSE prices in Manchester will increase by 26.4% in the next five years with 5.5% growth over the course of 2016, according to property adviser JLL.

The research comes from its new Northern Renaissance report, presented at a Manchester Residential Predictions Seminar in the city centre this morning (February 4).

The property adviser predicts that a prime two-bed city centre apartment with a current average price of £265,000, could leap forward to £279,000 by the end of the year.

In addition, the rental market is expected to grow with rents rising by five per cent in 2016 and an average of 4.2% every year over the next five years. This follows significant increases last year, with values and rents growing by 9.5% and 8.5% respectively.

JLL’s research also highlights the particularly strong demand for rental accommodation in the city centre. Last year an average of more than six applications were received per property, with many apartments letting in less than 72 hours of being on the market.

The firm has attributed the increases to the ongoing economic growth in Northern England. With total employment in Manchester forecast to rise by 4.3%in the next five years, the city is predicted to grow by 2,800 new households every year until 2020.

JLL expects build to rent or private rented communities (PRC) developments to become increasingly common in fulfilling the appetite for rental accommodation in the city and says that Manchester’s residential offering has become particularly attractive for investors.

Stephen Hogg, head of Manchester residential at JLL, said: “Our predictions highlight the particularly strong returns achievable in Manchester – with rents and capital values set to grow.

“This year we’re going to see the much awaited boom in development of Private Rented Communities. A significant part of the future pipeline in the city is now targeting the PRC sector with significant schemes like Middlewood Locks, St John’s and Muse’s New Victoria bringing forward close to 3,000 units in total.

“This is what a broad section of the market want. High quality rental accommodation that caters to graduates, young professionals and also families are set to do incredibly well in Manchester.

“There are already three developments of this kind under construction and a potential eight due to start on site this year, including the first large-scale forward funded scheme at New Bailey in Salford.”

The report, also delivered at the property advisor’s residential predictions event for Liverpool, in conjunction with City Residential, and in Leeds, highlights the growth predictions for markets across the region.

Adam Challis, head of UK residential research at JLL, said: “The buoyancy seen in the market last year is set to continue into 2016 and over the next five years in the North.

“With Manchester’s strong position it’s certainly the shining star and is benefiting from continued investment and a strong business community which is driving significant demand, particularly for private rented communities.”