Manchester used to be notorious for its poverty and gang violence, both of which were largely brought about by the need to fill the void left by the departure of heavy industry.
The issues facing the area came to national attention in 2011 when rioters in Manchester and Salford overwhelmed police and left a trail of utter devastation in the city.
At that point, it became obvious that leaving the area to recover on its own was just not an option and the foundations were laid for what became the Northern Powerhouse initiative.
Regeneration, the story so far
The Northern Powerhouse initiative was announced in 2014, so 2019 marks its fifth anniversary, which seems like an appropriate moment to take stock of its achievements so far.
In simple terms, the key achievements of the Northern Powerhouse initiative have revolved around infrastructure, jobs and housing, all of which are connected in a circle which has switched from being vicious to virtuous.
In other words, the Westminster government supported the local authorities in Manchester as they worked to improve their infrastructure (especially transport links and digital infrastructure).
These improvements encouraged employers to move to the area, which stimulated demand for property and gave home builders the confidence to start high-quality developments.
The income generated from Manchester’s working residents is now flowing back into the city’s coffers and funding ongoing improvements to the area, such as the extension of Manchester airport.
Economic growth has led to population growth
From about the early 1980s to the start of the Northern Powerhouse initiative, Manchester was a place people left in search of better opportunities.
Many times they did not return. Now, however, not only are people increasingly staying in Manchester or returning to it if they go to study elsewhere, but they are also moving to it from other parts of the UK, especially London, where professional millennials have found themselves increasingly frozen out of the property market, especially if they are looking for places to raise families rather than just “starter flats”.
Even though the London property market is currently stagnating, prices still remain some of the highest in the country, which means that the trail of people heading north is likely to continue for the foreseeable future.
In fact the population of the Greater Manchester area is forecast to increase from 2.68m to 2.95m by 2031.
Population growth has fuelled rental prices, but affordability remains good
The increase in population and, in particular, the increase in “lifestyle renters”, (mostly students and young adults in their pre-children days), has naturally fed led to an increase in rental prices, creating a demand amongst landlords and investors for high yielding buy-to-let properties in Manchester.
In fact the last five years have seen a 38% increase in average rents in the Manchester area. While this headline figure may give some investors concerns that the Manchester rental market is turning into a bubble in actual fact this growth reflects the fact that Manchester has worked to transition away from heavy industry and other sectors which create unskilled jobs and towards knowledge-based sectors with (highly-) skilled jobs and commensurate wages.
In other words, even though average rents have increased, so have average incomes, hence affordability remains good.
For more information on the Manchester property market or to arrange a free online property valuation, please contact Indlu Estate Agents.