Is Manchester the new London?
As companies and young professionals turn away from the capital and head towards Manchester, the large northern city is seeing the creation of its own property bubble.
For years now, the media has been awash with stories discussing the rise of house prices in London and how more and more people are forced to commute to its centre from its periphery. We all know why – and that’s because of the growing gap between wages and property prices.
In these reports, London is often compared with northern cities such as Liverpool and Manchester where living costs are generally lower and the standard of life on a lower income is much higher… but something strange has started happening over the last decade. The percentage of home ownership in Manchester dropped from 72% in April 2003 to 58% in February 2016 – a staggering drop of 14%.
This situation has led to many property buying experts scratching their heads trying to figure out what is going on. According to Rightmove, the online property portal, the majority of sales for the previous year were not houses, but flats – with many buyers being young professionals who are forgoing the chance of having a family to focus on their careers. And with the 2011 census showing a decline of households based around families in the city, the need for a large house is unnecessary.
The interesting part is that most of the young professionals in Manchester are still renting properties due to its large graduate population, with a 14% increase in the number of renters since 2003. While this situation should ultimately lead to house prices dropping as demand plunges, Manchester may simply become the next London – due to its ever-increasing population – with foreign investors driving prices up even further.
Worryingly for those looking to move to Manchester, the aforementioned outcome is becoming increasingly likely, with large businesses forgoing the capital in favour of cheaper land and commercial property in the north. Examples include the BBC’s highly publicised move to Salford.
“Manchester city centre had a few thousand people living there a decade ago,” said Dave Power, chief executive of housing association One Manchester.
“That is now tens of thousands, mostly in private rented sector properties reflecting probably the younger population, which has joined Manchester through digital and business jobs.”
For those looking for a fast house sale in the city, options are looking decidedly grim. This is not an issue for vendors who are willing to wait to sell – but there are people who need to move urgently and are facing a huge loss just to sell their house. Luckily, there are property buying companies who buy any home for cash with exceptional customer service, to lend a helping hand.
Worried you’ll lose money on your home? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.