Manchester Property Market Forecast 2023 Shows Strong Growth Ahead

When it comes to property growth, it’s difficult to find a better location than Manchester.

The North West city has dominated growth charts over the last 20 years and has surpassed every other major UK city.

But can this growth continue into 2023? And what about the coming years?

Knowing whether future capital growth is expected is essential for investors considering making a Manchester investment in 2023.

Let’s look at what the industry experts anticipate for the Manchester property market and the broader UK market, with the latest Manchester property market forecast for 2023 and the UK housing market forecast.

Manchester Property Market Forecast 2023: Property Price Predictions

Looking at Manchester house price predictions from industry-leading experts, the city is on its way to seeing some of its highest-ever growth over the next several years. This includes a huge expected rise in house prices throughout 2023.

Here’s a quick summary of what you need to know:

• Savills predicts average property prices in the North West region will grow by 11.7% by 2027.
• Rental values are forecast to grow 4% on average in 2023, according to JLL’s Manchester residential market forecast.
• Oxford Economics predict Manchester to have the highest economic growth of all UK cities over the next five years, with a growth rate of 16.4%.

Now:

Let’s dive into these statistics a little deeper.

In their 2022 report, JLL  predicted an expected 4% average growth for rental values in Manchester.

A big part of the Manchester residential market is its rental market, and this is also a huge reason why so many investors are keen to invest in this Northern powerhouse city.

Compared to other cities known for their rental markets, Liverpool and Leeds, the Manchester property market forecast see Manchester hitting the top spot.

These cities follow closely behind Manchester’s expected rental value increase with just 3% rental market growth.

Alongside these predictions, it’s also worth noting that the Manchester housing market saw record-high rent prices in January 2022, rising consistently throughout the region from April 2021.

Studio apartments, in particular, saw an increase of around 10% (£76pcm) in only one quarter, taking the average studio rents to above £800pcm for the first time.

With such a substantial rise in rent, there is no indication of a dip in the Manchester rental market any time soon.

When looking at future growth potential, it’s good to look at how property prices have performed in the past.

Why is this?

Put simply, if there has been consistent growth in an area over the last 20 years, this is a strong indicator that you can expect further development in the future.

Over the last five, 10, and 20 years, Manchester property has seen consistent and considerable growth.

Let’s explore this in more detail by analysing Manchester property market performance between 2001 and 2021.

What Happened to the Manchester Property Market in 2020?

To give some context behind the growth rates anticipated for Manchester, it’s essential to understand what happened to the UK property market in 2020 and 2021.

At the start of 2020, outlooks for the UK property market were largely positive, with Boris Johnson’s landslide electoral victory in December 2019 increasing market stability and confidence.

No one could have expected what was to follow, though, with the country hit with an unprecedented lockdown following the beginning of the Covid-19 pandemic.

Property market activity took a slump from March 2020, and many were fearful that the housing market was heading for a crash.

But what actually happened?

As we know, despite these negative claims and gloomy predictions, 2020 marked the start of a huge property market boom across the country.

By July 2020, Savills found that property interest had increased by 60% compared to the 12 weeks before lockdown.

These growth levels were mirrored in the Manchester market, which saw significant house price growth over the 12 months in 2020.

The trend shown in Manchester is almost identical across every property type.

While there was an initial dip in the first six months, house prices started to see a strong increase over the latter part of the year.

The average Manchester property initially started at £182,906 before rising to £200,242 in December 2020, a percentage increase of 9.48%.

We know what you’re thinking. It’s all well and good knowing that Manchester’s property market is robust and that rental values and property prices are rising year after year.

But, you may be asking:

“Why are Manchester property prices rising?”

Here are the main reasons behind the growing strength of the Manchester property market:

• Manchester regeneration.
• Manchester population growth.
• Manchester’s student scene.

Thanks to ongoing regeneration, Manchester has transformed itself into one of the UK’s most desirable places to live.

Billions have been spent regenerating Manchester, and notable projects like MediaCityUK and Spinningfields continue to put this city on the map and attract new interest and business growth.

This has led to population growth throughout the city, with many people leaving behind cities like London and heading to Manchester.

Research from the Guardian in 2020 found that 13% of people leaving the capital chose to live in Manchester, which is 12% higher than the number recorded in 2009.

When you think about the opportunities on offer and the lower average property price and general cost of living compared to London, it’s easy to understand why so many choose to live in Manchester rather than the capital.

According to a report from Manchester City Council, Manchester’s population is predicted to reach higher than 635,000 by 2025.

It gets better:

Currently, around 37% of the population in Manchester is aged between 18 and 34.

Since most renters are from younger demographics, such as students and young professionals, this is excellent news for the Manchester rental market.

Manchester has long been known for its student scene, boasting the largest student population in Europe.

The city is home to prestigious universities and even has one of the country’s best graduate retention rates at 51%, thanks to the city’s unrivalled business scene.

Manchester’s business scene was voted amongst the top 10 global emerging ecosystems for business startups in 2020, alongside Liverpool.