Lockdown 1 saw the housing market screech to a halt. It was a grim time for real-estate professionals. Fortunately, the government realized the importance of getting the housing market back on the rails.
It therefore quickly allowed it to resume operations. What’s more, it granted a Stamp Duty holiday to give it a boost. These measures have helped keep the UK’s housing market ahead of the pandemic.
Average house prices rose in 2020
According to the Zoopla House Price Index, over the course of 2020 average house prices in the UK rose 3.9%. A closer look at their shows that most of this growth was driven by the Midlands and North of England. Manchester led the way with a 5.7% rise. Leeds was right behind on 5.6%. They were followed by Nottingham (5.4%), Liverpool (5.3%), the North West of England (5%), Yorkshire and the Humber (4.9%) and Wales (4.9%).
Looking at individual towns and suburbs, Greater Manchester is also clearly leading the way. Eccles (five miles West of Manchester city centre) saw home prices rise by an incredible 16%. Chadderton and Middleton (eight miles and six miles north of Manchester city centre) saw home prices rise by 10.9% and 10.8% respectively.
Rightmove forecasts the house-price growth to continue through 2021, albeit at a slower pace. It believes that the year will end on an overall increase of 4%. Early indicators are that the growth areas will remain the Midlands and North. This is due to a number of factors, many of which, ultimately, hinge on economics.
The rise of remote working
Remote working was a growing trend long before COVID19. Currently, all the signs are that it’s here to stay for the long-term. It has been widely reported that many companies are eliminating, or at least reducing their office space. It has also been widely reported that knowledge-workers have been fleeing cities for suburbs, outlying towns and even the countryside.
Put these facts together with the established trend of Londoners moving to Manchester and a clear picture emerges. Greater Manchester offers all the attractions of Greater London but at a much more affordable price.
Those looking for even more affordable property can look at other parts of the Midlands and North. These may not (yet) have everything Manchester can offer, but they are still very attractive places to live and vastly more budget-friendly than London.
Choosing Greater Manchester specifically, however, does allow people to hedge their bets somewhat. Manchester has a strong local economy, meaning that there is an obvious Plan B if people find long-term remote working is not right for them. It also has great transport connections, which opens up options for “hybrid-working” between an office base in London and remotely in Manchester.
The growth of the Northern Powerhouse
Prior to the pandemic, the government reiterated its commitment to maintaining its support for the continued development of the Midlands and North. It’s only to be expected that the financial impact of the pandemic will have an impact on what support it can offer. It does, however, look very likely that, at the very least, the development of transport infrastructure will continue.
The government has already committed to HS2 and the Greater Manchester local authorities have already committed to the expansion of Manchester Airport. These are arguably by far the most important infrastructure projects in the area. In their different ways, both will make Manchester (and the surrounding area) even easier to reach from the UK, Europe and the rest of the world.
These projects offer the prospect of a significant “double win” for the city and its housing market. Firstly, even fully-remote businesses sometimes like to bring all their employees together for real-world “offsites”. Since these companies are likely to have employees from all over the UK, if not the world. It, therefore, makes sense for them to choose a location which is convenient for everyone, not just Londoners.
Secondly, it makes Greater Manchester a more attractive destination for companies which do need (or want) to work out of a specific location. Firstly, it means that they are well-placed to access the entirety of the UK market. Secondly, it means that they can easily arrange travel to and from key export destinations, be those ones they have now or ones they want to develop.
The extensive digital infrastructure
It’s also worth noting that the Midlands and North have extensive digital infrastructure. This is a large part of the reason why the Greater Manchester area has become a hub for digital industries, particularly creative ones.
The affordability of commercial property
For companies which do want to hold on to commercial property, Manchester is, again, hugely more affordable than London. Up until relatively recently, there were a couple of arguments in favour of having a London base despite the cost. The first was that it had great international travel connections. The second was that it had a large pool of talent from which to draw.
Overall, London does still have a wider range of international travel links than Manchester. For most companies, however, this is now irrelevant. Manchester Airport already covers most of the key business destinations in the world and the expansion will see it add even more. In other words, it can already cater to the needs of the vast majority of businesses.
London also has a great pool of talent, but it is questionable how long it can retain it. Right now, it is facing stiff competition on at least three fronts. These are remote working, Brexit and competition from other parts of the UK, especially Manchester.
Manchester, by contrast, has really worked hard to reverse the longstanding “brain-drain” of its many graduates heading off to start their careers in other locations (especially London). This means that it now has an extensive and established talent pool. What’s more, the fact that it is now considered to be a hugely attractive place to live means that it’s relatively easy to persuade skilled workers to relocate there.
Simon Hardingham, Sales Manager of Manchester estate agents, Indlu.