For many years, people from Manchester headed down south to the bright lights on London in search of work. These days, however, the situation is very much reversed and it is millennials from London who are heading north in search of better jobs. Manchester’s robust economy is resulting in continuous job creation, which, in turn, is boosting the housing market.
A diverse economy helps protect Manchester against Brexit
One of the reasons why the London property market is stagnating is because two of its biggest industries are staunchly opposed to any Brexit and, especially, to a hard Brexit and fear what it might mean for them. These industries are financial services and education.
Manchester does have its own financial services and education industries, however, the financial services industry in Manchester forms a far smaller part of the overall economy, while the education sector has the benefit of much greater affordability as well as strong links with countries outside the EU, both of which provide it with substantial protection in the event of a hard Brexit.
Manchester is also a significant digital hub, with its IT sector growing all the time, plus there is a variety of other sectors with a presence in the area, including its traditional heavy industry and agriculture.
More jobs means more demand for property
Last year (2018), the demand for office space in Manchester was 54% up on the 10-year average. This was mainly driven by the tech sector, but other sectors are also expanding. In addition to increased demand for commercial property (both office and industrial), there is also an increased demand for residential property.
Some of this demand is created by people opting to stay in Manchester instead of moving elsewhere. For example, increasing numbers of graduates from Manchester’s universities are opting to stay in the city to begin their professional careers.
There is also demand from people who wish to move to Manchester after having studied elsewhere, either returning to the city of their birth or simply moving to the city from another part of the UK precisely to have access to better job prospects – along with more affordable housing.
Manchester still has room to grow
The local authorities in Manchester have been very well aware of the need to protect the city from becoming a victim of its own success. In particular, they have grasped the fact that a large part of Manchester’s attraction to well-educated millennials is the fact that it offers good employment opportunities together with a reasonable cost of living, including housing which is still vastly more affordable in Manchester than in London.
This is partly due to the fact that many of the jobs created have been skilled roles, which are paid accordingly, partly due to the fact the house prices in Manchester were coming off a very low base and therefore had (and still have) plenty of room to increase without compromising affordability and partly because local authorities in Manchester have encouraged the sensitive development of both commercial and residential property.
This development is continuing and there is still plenty of space for Manchester to continue “onwards and upwards” while maintaining its pleasant and highly-valued green spaces.
Fletcher Day are a full service commercial law firm in London and Manchester, with an experienced team of property lawyers who specialise in acquisitions, financing, licensing and landlord and tenant matters.