Liverpool vs. Manchester - Residential Property Trends - Delph Property Group
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2 3 Liverpool and Manchester are two of the most prominent cities at the heart of England’s Northern Powerhouse – a project designed to boost economic “Albert Dock and Canning Half Tide Dock Liverpool, at dusk today” by JRadarsmum67 is licensed under CC BY 2.0 growth and redistribute the national economy. The nation’s Prime Minister, Theresa May, stated that the country has been dependent on growth in London for too long and was heavily supporting additional development of the Northern Powerhouse, helping “the great cities and towns of the North pool their strengths and take on the world”. Both Liverpool and Manchester have undergone significant levels of redevelopment and regeneration since the turn of the Millennium. “Media City” by John-Paul Walsh is licensed under CC BY 2.0
4 5 Manchester: from the Millennium to MediaCityUK The 2002 Commonwealth Games was a real turning point for Manchester, after failing in its bid to host the Olympic Games in both 1996 and 2000. Vast amounts of the city centre have been redeveloped, with buildings dating back to the 1960s being updated with more modern features. Urban residential areas of Manchester have benefitted greatly from the investment in city centre infrastructure. Suburbs with significant industrial heritage such as The Green Quarter, close to Victoria Railway Station, have undergone extensive multi-million-pound development, creating vibrant new living and working communities that offer the perfect balance between contemporary style and convenience. This once derelict wasteland has since become the backdrop for one of the most ambitious regeneration projects in Manchester’s recent history. Another Manchester area revived from its post-industrial decline is Salford. Between 2003 and 2006 alone more than £115m was invested into the housing stock for residents of Manchester and the City of Salford, resulting in fantastic urban renewal. The waterfront regeneration and creation of MediaCityUK has led to Salford City becoming a national hub for media production and is now the home to the British Broadcasting Corporation (BBC). The legacy of the 2002 Commonwealth Games has also been felt in and around East Manchester, with Manchester City Football Club investing heavily alongside the City Council to develop the New East Manchester project. The £1bn plan to create a world-class sports and leisure complex is just one exciting facet of the regeneration taking place on a scale virtually unprecedented in any other English city. The Greater Manchester Housing Fund has also helped to free up land for residential development, regenerating existing areas and building new homes across the city. To date, more than £97m has been used to build 1,184 units at nine separate sites across Greater Manchester. “A View of the Manchester Skyline from 111 Piccadilly, Manchester.” by Stacey MacNaught is licensed under CC BY 2.0
6 7 Liverpool: a legacy from its 2008 European Capital of Culture status Liverpool has benefitted from a similar legacy following its 2008 award as the European Capital of Culture. It has since transformed into one of the UK’s leading business and leisure destinations, underpinned by an ambitious and far-reaching regeneration programme that’s hauled Liverpool out of its post-industrial doldrums. With the likes of the Albert Dock and Queen Square leading the way in terms of regeneration in Liverpool prior to the turn of the Millennium, there are many other more recent regeneration projects that have taken the city to even greater heights. Liverpool’s new £19m cruise liner terminal now welcomes dozens of cruise ships and has become undoubtedly one of the most desirable cruise destinations in Europe; building on the city’s rich maritime heritage. With 115,000 passengers and crew expected to disembark from around the world in 2016, Liverpool is fast becoming a great place for tourists to explore. Undoubtedly the most impressive area of development on the skyline of Liverpool’s Docklands is West Tower: a 40-storey skyscraper that’s now the tallest building on the city’s landscape, featuring high-end apartments, fine dining and ample business space. With heightened numbers of tourists and a growing population, the Liverpool ONE complex was another celebrated redevelopment project, breathing life into 42 acres of previously underutilised land in the heart of Liverpool city centre at a total investment cost of £920m. Now, Liverpool ONE is the largest open air shopping centre in the UK, featuring six impressive districts mixing retail, leisure and accommodation. The investment in Liverpool hasn’t stopped there, either. The redevelopment of the Gateacre former comprehensive school site and the £100m investment in Norris Green Village are two more impressive regeneration projects. The latter of the two is creating a sustainable neighbourhood just five miles outside the city centre with at least 800 new family homes helping to create a new, vibrant community. “The buildings of Pier Head from the Albert Dock” by Beverley Goodwin is licensed under CC BY 2.0
8 9 Average residential property prices in Manchester & Liverpool now higher than pre- recession prices Average residential property prices in Manchester and Liverpool in Q2 2008 stood at £138,000 and £121,500 respectively. Using data from the Office for National Statistics (ONS), we have been able to ascertain that average residential property prices in Manchester and Liverpool in Q2 2008 stood at £138,000 and £121,500 respectively. Despite a post-recession dip, the figures indicate the average price of residential property in both cities has now exceeded their pre-recession highs to £145,000 (5% increase) and £124,995 (3% increase) respectively. Mainstream capital values are forecast to continue to grow across the North West of England, according to data from Savills’ Residential Research team. They predict a 13.7% rise in residential property values across the North West over the next five years (3% increase in 2016, 2.5% increase in 2017, 2.5% increase in 2018, 2% increase in 2019 and 3% increase in 2020). 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Q4 - 1995 Q3 - 1996 Q2 - 1997 Q1 - 1998 Q4 - 1998 Q3 - 1999 Q2 - 2000 Q1 - 2001 Q4 - 2001 Q3 - 2002 Q2 - 2003 Q1 - 2004 Q4 - 2004 Q3 - 2005 Q2 - 2006 Q1 - 2007 Q4 - 2007 Q3 - 2008 Q2 - 2009 Q1 - 2010 Q4 - 2010 Q3 - 2011 Q2 - 2012 Q1 - 2013 Q4 - 2013 Q3 - 2014 Q2 - 2015 Liverpool Manchester
10 11 Residential property Liverpool sales in Manchester & Q3 2009 Q4 2015 Liverpool also soaring 3,580 6,339 from recession lows property sales property sales 77% Since the post-recession lows in Q3 2009, both increase in Manchester and Liverpool have experienced residential impressive growth in sales of residential property property sales of all types. Indeed, the figures from the ONS show Population 2009: Population 2015: that all types of residential properties registered 457,500 478,600 5% increase increased sales in Manchester and Liverpool. In Liverpool, sales of apartments and maisonettes totalled 689 in Q4 2009, but by Q2 2015 this had almost doubled to 1,058 purchases. That growth in completed sales of apartments and maisonettes was felt Manchester Q3 2009 Q4 2015 even greater in Manchester with 2,470 sales in Q2 2015 compared with just 1,488 in Q4 2009. Detached homes were one particular area where Liverpool outperformed Manchester in residential 4,359 7,107 property sales between Q4 2009 and Q2 2015. Sales of detached properties in Liverpool grew from 318 in Q4 2009 to 693 in Q2 2015. Meanwhile, purchases of detached properties in Manchester grew more modestly from 210 in Q4 2009 to 310 in Q2 2015. The residential property market of both Manchester and Liverpool would certainly appear buoyant in the context of the overall population growth of each city. Although the population of Liverpool and property sales property sales 63% Manchester increased by 5% and 10% respectively between 2009-15, the number of residential property sales has risen more quickly (77% and 63%). increase in This would suggest that more people within Liverpool and Manchester are displaying mobility and a willingness to either get themselves on the property ladder, upgrade, downsize or simply try living residential somewhere else. Nevertheless, with the Office for National Statistics forecasting population growth to rise in Manchester to 625,000 by 2025 and 495,600 in Liverpool by 2024, there remains sustained pressure on property developers to keep up with demand for new-build homes. property sales Population 2009: Population 2015: 483,800 530,300 10% increase
12 13 Apartment and maisonette sales more frequent in Manchester than Liverpool More than a third (36%) of residential properties sold in Manchester in 2015 were apartments or maisonettes; with Liverpool experiencing a more modest rise in apartment and maisonette sales post-recession (18%). There’s a suggestion by the Manchester Evening News (MEN) that Manchester city centre is in the midst of a building boom. The MEN states at least a dozen skyscrapers of more than 30 storeys are in the process of being built, with more than 10,000 apartments granted planning permission or in the process of receiving it. This volume would certainly explain the increasing proportion of apartments sold here. The charts below demonstrate the that the split between the most popular types of residential property sold in Manchester and Liverpool differ. Terraced and semi-detached houses make up 71% of all property sales in Liverpool, compared with just 60% in Manchester. Data published in June 2016 from the Office for National Statistics shows a considerable difference in the number of people aged 16-39 years-old in Liverpool (187,800) than Manchester (246,400). With more young professionals seemingly residing in Manchester, the demand for stylish, accessible accommodation is understandably high and could explain why apartments and maisonettes are more readily available and sell with greater regularity there. Liverpool 2015 Manchester 2015 Detached houses Detached houses Semi-detached houses Semi-detached houses Terraced houses Terraced houses Apartments/maisonettes Apartments/maisonettes
14 15 Detached property sales rise post-recession – despite remaining in the minority Liverpool has experienced more than double the amount of sales of detached properties since the economic downturn. In 2009, the city saw just 1,124 sales, but in 2015 there were 2,839 detached residential homes sold, representing an 153% increase in transactions. Manchester has also experienced encouraging growth of detached property sales post-recession. In 2009, Manchester sold just 693 detached homes, but in 2015 there were 1,265 detached properties sold, representing an 83% increase in transactions. Nevertheless, detached property sales are in the minority in Manchester and Liverpool in the context of all types of residential property acquisitions. Some reports suggest that the cost of home ownership in Manchester has led to the increasing popularity of apartments and the indifference towards semi- detached and detached properties. A Resolution Foundation report found that the proportion of home owners in Greater Manchester fell from 72% in April 2003 to 58% in 2016. Data from property website Zoopla shows an average price for a semi-detached property in Manchester to be £188,096. When levelled against the average salary in the North West of England (£25,584), are properties simply becoming less affordable compared to stylish, contemporary, well-located apartments and maisonettes? The 2011 Census data also indicates the average household size in the city of Manchester is declining, with more single people aged under 65 and a decline in the number of family homes with children, which may also explain the appeal of apartment-style properties which give them flexibility in terms of lifestyle and work choices. However, it’s important to note that Manchester City Council projects Manchester’s population to reach 532,200 by 2021, an increase of 5.8% from the 2011 Census data. With household sizes decreasing but more people moving into the city, it’s evident that more properties are required to house everyone.
16 17 More new build sales in Manchester than Liverpool in 2015 Of all the residential stock sold in Manchester, 15% amounted to new build sales in 2015, compared with 12% in Liverpool. There is no doubt that figure is likely to increase in the coming years with the continued regeneration of both cities as the Government homes in on its Northern Powerhouse. However, concerns have been raised that the rising cost of city centre land and the lack of bank finance is putting some development projects at risk. Bill Enevoldson, chief investment officer, Greater Manchester Combined Authority core investment team, told Insider two property markets exist in Greater Manchester. “The first is the city centre, where things are picking up. If you look at the £300m Greater Manchester Housing Fund, we’ve approved £66m for six projects and all but one are for city centre apartments within three square miles. “The second market is the rest. There’s a big appetite from institutional investors, mainly because the yields here are better than London. “The banks are starting to lend in the city centre. There’s more money about for the right stuff. Businesses are still finding it hard to get investment.” Andrew Antoniadis, director of real estate finance at CBRE, said: “The funding is there for the best developments, with the best schemes with a pre-let. [However], if you don’t have all three it starts to get harder.” Despite the increased uncertainty following the unprecedented Brexit vote, private residential property investors like Delph Property Group can provide security for residential developers with the ability to purchase an entire development off plan before the first brick is laid. Additionally, forward funding deals are increasingly common, giving developers the up-front investment needed at every stage of their project.
18 19 New build apartment sales twice as frequent in Manchester than Liverpool in 2015 The figures, obtained from the Office of National Statistics (ONS), state that Manchester sold more than twice as many (142% more) new build apartments than Liverpool in 2015: Liverpool Manchester 955 sales 2,314 sales This would suggest that not only is there greater appetite to purchase apartments and maisonettes in Manchester, the figures also indicate there are more new developments available for people to buy in Manchester than Liverpool. Given that detached and semi-detached residential properties still make up the vast majority of sales in Liverpool, it suggests that although there is a modest shift towards apartment living in Liverpool, this shift is far greater in Manchester as urban living becomes increasingly in-demand due to its stylish, trendy nature – particularly for young professionals.
20 21 Residential property About Delph Property is hot property in Group. Manchester and We buy off plan or completed apartment blocks Liverpool from 50 - 400 units in city centre locations across the UK. We also offer forward funding and large “Investors across the world are competing with first-time buyers to purchase deposits to reduce risk for builders and developers. all types of new build developments across Manchester and Liverpool. The North West is beginning to offer fantastic returns on capital for investors and Since it was founded in 1948, Delph has been solely focused on residential with property markets in Manchester and Liverpool stabilising and recovering property either through investing or developing, giving us unparalleled well post-recession confidence is certainly on the up. experience that sets us apart from other companies. Manchester and Liverpool are just two of the many UK cities in which Delph Property Group invest and buy new residential developments. By funding For land and acquisitions contact: construction costs and eliminating all sales and marketing costs, we allow Nicholas Belkin the developer to move on to the next project quickly and efficiently.” Tel: +44(0) 20 7907 5565 Email: firstname.lastname@example.org For general enquiries contact: Nicholas Belkin, 44-45 Great Marlborough St, London, W1F 7JL Head of Acquisitions, Delph Property Group Tel: +44(0) 20 7907 5555 Fax: +44(0) 20 7907 5556 Email: email@example.com Visit our website: http://www.delphgroup.com Sources https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/numberofresidentialpropertysalesfornationalandsubnationalgeographiesquarterlyrollingyearhpssadataset06 https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/medianhousepricefornationalandsubnationalgeographiesquarterlyrollingyearhpssadataset09 https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/numberofresidentialpropertysalesfornationalandsubnationalgeographiesnewlybuiltdwellingsquarterlyrollingyearhpssadataset07
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