House prices in Manchester will increase by 26.4% in the next five years, with 5.5% growth over 2016, according to JLL.
A prime two-bedroom city centre flat with a current average price of £265,000 could rise to £279,000 by the end of the year, according to research published in JLL’s Northern Renaissance report.
The rental market was also expected to grow, with rents rising by 5% in 2016 and by an average of 4.2% every year over the next five years.
This follows significant increases last year, with values and rents growing by 9.5% and 8.5% respectively.
JLL’s research also identified strong demand for rental accommodation in the city centre. Last year, an average of more than six applications were received per property, with many flats letting in less than 72 hours of being on the market.
JLL has attributed the increases to the ongoing economic growth in Northern England. With total employment in Manchester expected to rise by 4.3% in the next five years, the city is forecast to grow by 2,800 new households every year until 2020.
The firm expects built-to-rent or PRS developments to become increasingly common to fulfil demand for rental accommodation in the city.
Stephen Hogg, head of residential at Manchester JLL, said: “This year we’re going to see the much-awaited boom in the development of private rented communities.
“A significant part of the future pipeline in the city is now targeting the PRC sector with significant schemes like Middlewood Locks, St John’s and Muse’s New Victoria bringing forward close to 3,000 units in total.
“This is what a broad section of the market wants. High-quality rental accommodation that caters to graduates, young professionals and also families are set to do incredibly well in Manchester.
“There are already three developments of this kind under construction and a potential eight are due to start on site this year, including the first large-scale forward-funded scheme at New Bailey in Salford.”
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