House price growth in Manchester and Salford regularly outstripped the national British average with strong renting yields also boosting the property market, new research suggests.
Prices have increased by 34% in Manchester and 38% in Salford in the seven years to July 2017 compared to a national average of 30%, according to the report from real estate agency Cushman & Wakefield.
Meanwhile, annual returns of between 11% and 20% have been seen for both metropolitan boroughs in the three years to July 2017.
The report says that while the latest forecasts record stable growth in the UK housing market in the coming two years, before accelerating from 2020 onwards, both Manchester and Salford are predicted to continue to outperform the wider UK market over the coming decade.
Similar trends are forecast for the rental market, with rental inflation running at around 2% per annum to 2021, before returning to a more typical rate of 3% plus per annum from 2021.
‘Manchester benefits from a particularly active investor market, with over 52% of the entire housing stock lying in the Private Rented Sector (PRS),’ said Julian Cotton, associate director at Cushman & Wakefield.
‘Considering the historically high rates of house price inflation in both Salford and Manchester, initial rental yields remain strong at present prices, averaging 5.3% for both areas. This resilience is a clear indication of underlying strong tenant demand as rates of rental inflation come near to keeping pace with house price growth,’ he added.
The report also says that Manchester thrives on a vibrant and varied economy, fueled by an increasingly large, highly skilled workforce. It has a significant number of FTSE 100 companies, over a quarter of the city’s office space is occupied by established companies working within the legal sector whilst other key areas of employment include financial services, insurance, media, tech and business services.
It also says that Manchester’s bright future is underlined by the strength of economic and demographic forecasts, with the city set to outperform the UK benchmark in a number of key areas. Five year forecasts from Oxford Economics highlight the significant draw of the city with substantial growth in both the local workforce and population.
Indeed, it adds that a great deal of these new jobs are predicted to come in the form of highly skilled roles, with the professional, two scientific and technology sectors set to experience a 10% plus increase in their workforce by 2022.
‘Overall, Manchester and Salford present excellent investment opportunities, particularly for those who are considering their options outside of London,’ the report concludes.
