Manchester and Salford’s burgeoning build-to-rent pipeline has ground to a halt, with no overall growth recorded in the past year.
Despite a surge of activity in other major cities, growth of the UK’s second-largest market has plateaued at 22,980 homes, data from the British Property Federation and Savills reveals.
“The rental values in the city centre of Manchester have peaked,” said Gary Forrest, chairman of the High Street Group. “The opportunity is in developments around Salford and the commuter belt.”
Scott Hammond, founder of Eutopia Homes, added: “The key is ensuring pricing is right and that any development is well suited to the local market.
“The market will only support a certain quantum of product before pricing gets hit, but, as we’ve seen with student housing, high-quality, well-located buildings will continue to create value for investors.”
The largest schemes in Manchester include Get Living’s 800-flat development under construction at Middlewood Locks (pictured), Renaker’s 664-flat Crown Street project, sold to Maslow Capital, and Moda Living’s 466-home Angel Gardens.
At the end of last year there were 152,071 BTR homes in planning, under construction and completed in the UK, up 15% on 2018, with an extra 20,355 flats.
Half of this BTR stock is concentrated in London, with 76,408 homes. Manchester and Salford make up 15% and Birmingham 5%, with 8,069 flats.
While Manchester may have cooled, London and Birmingham continue to grow.
Last year, London added 8,122 units to the total, up 12%, and Birmingham nearly doubled with an extra 3,178.
Forrest added: “Birmingham is where Manchester was five years ago; the whole of Digbeth is being redeveloped. Two years ago, the institutions didn’t like it. Now just about every institution wants to be in Birmingham.”
Last year saw Invesco and Cording both backing High Street Group developments with a combined £140m in investment in Birmingham. Greystar and L&G are in talks on an additional £260m of funding on major schemes in Eastside and the Jewellery Quarter.
The report also pointed to growth in Leeds, up 29% to 5,780 units, and Glasgow, up 13% to 3,297, but highlighted lack of growth in Liverpool, which stayed at 3,998 units.
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