Real Estate Insights

The Build to Rent (BTR) market in Manchester is experiencing a surge in demand due to affordability issues, the rise of single-person households and the attraction of a flexible, communal living environment. According to recent statistics, the rental trend in Manchester is showing rapid growth, with rents in the city centre recording an annual growth rate of 22%, compared to 18% in Birmingham, the next biggest. Additionally, the vacancy rates in Manchester properties are only 0.5%, which means that there is a very high demand for rental properties.

Demographics of BTR renters in Manchester

Manchester has a large population of renters, particularly among young people and those with lower incomes. The statistics show that 56.9% of those aged 25-34 are renters, and this number is expected to grow as house prices continue to rise. Additionally, the under-45 age demographic has a lower rate of homeownership compared to older age groups, as shown in the table below:

This demographic shift towards renting is also influenced by the fact that younger generations are having fewer children and are more likely to live alone or with housemates. For example, among the under-45 age group, approximately 48% have 0-1 children and are not homeowners, as shown in the table below:

These figures suggest a significant under-supply of rental properties in Manchester, particularly for the under-45 age group.

Supply and demand of BTR properties

Currently, there are only around 10,000 BTR apartments in Manchester, with an estimated 18,000 apartments required to meet the demand of the under-45 age group alone. This highlights a clear need for more investment in BTR properties in Manchester, and it is projected that this will only increase in the coming years.

According to Urbanbubble, fewer than 500 BTR apartments will be completed in Manchester, Salford and Trafford this year, which is a dramatic decrease compared to previous years. However, Urbanbubble predicts that 1,457 BTR apartments will be delivered in 2023. Although this is a positive outlook, it still falls short of the projected demand for rental properties in Manchester.

Conclusion

Manchester’s build-to-rent market is poised for significant growth and offers a promising opportunity for investors. With an increasing population, high demand for rental housing, and a low vacancy rate of 0.5%, the market shows no signs of slowing down.

The statistics show that under-45s in Manchester are facing a housing affordability crisis, with a large percentage unable to enter the homeownership market. This demographic has a high demand for rental housing, especially in the city center. Moreover, the majority of BTR renters are in the 18-44 age group, making it a lucrative market for developers.

However, the number of BTR units delivered in Manchester is falling dramatically, with only 431 units expected to be completed in 2022. This presents an opportunity for developers to step in and meet the growing demand for rental housing. Based on the data, we can estimate that around 20,000 BTR units will be required in the next five years to meet the housing needs of the under-45s demographic.

In conclusion, Manchester’s build-to-rent market presents an excellent opportunity for developers and investors. With a high demand for rental housing, low vacancy rates, and a growing population, the market is ripe for growth. However, to meet the needs of the under-45s demographic, developers need to deliver a significant number of BTR units in the coming years.