Sir Richard Leese recently revealed plans to raise the bar for property developers with proposals for the future design and planning of housing in Manchester. This is just one potential impact, devolution is expected to have on the city over the next two years.
Landlords in Manchester will be watching developments with interest as devolution begins to have an impact on all aspects of the private rented sector, from tenants’ rights to the quality of new developments built in the city.
Devolution may be a double-edged sword as standards may well be tightened, forcing landlords to accept new pro-tenant rulings. Despite this, there is increasing evidence that investors are turning their attention towards Manchester with the latest data suggesting that the city that was once associated with urban decay is now the biggest focus for foreign direct investment outside London.
This is not surprising given that Manchester has been transformed over the past 20 years into an economic power house with an economy bigger than Wales. The city continues to attract young people looking to build their careers in the creative industries with Manchester providing one of the best locations to build a career in the media.
A large population of people of working age means that demand for rental property is high in areas close to places of work. Manchester’s population of working age people is substantially higher (71%) than the UK average of 62%. This percentage may rise if devolution results in a closure of the current North South divide which exists between a city referred to as ‘the North’s last big hope’ and London.
One in four people in the city now live in rented accommodation which is an indication that property prices have risen beyond the reach of many city inhabitants making it more attractive to rent. It may also be more attractive to rent in Manchester if there are no long term plans to continue living in the city other than for work purposes. The high number of tenants in the city means that in some cases landlords are making a gross average rental return of 7.6%.
In 2014, Chancellor George Osborne announced the £1billion Manchester Devolution Deal which came as a result of the referendum on Scottish independence. Britain’s largest metropolitan areas were promised greater autonomy over their own affairs and even the possibility of raising taxes.
Greater Manchester will gain more control over certain spending decisions particularly in relation to transportation and housing. If devolution pays off for Manchester, then the prediction from Oxford Economics that Manchester will become the fastest growing city in the UK over the next 10 years will come as good news for landlords owning property in the city.
The not so good news for tenants hoping to escape into home ownership doesn’t look quite so good. The Manchester Evening News reports that 40 per cent of 25 to 45s surveyed in the North West “had little or no prospect of ever owning their own house.
Posted on: February 26, 2015