A city centre slowdown or a surge in the suburbs? What buyers and renters can expect from Greater Manchester’s property market

When the housing market in England reopened on May 13, it was unclear how the industry would truly be affected by the continued pandemic.

While some wondered whether people would whether the pandemic would kill the mood for moving, it turned out that, for the most part, it was back to business.

According to property website Zoopla, the asking price of houses sold in June across the country went up by 7pc compared to last year.

They attributed the increase to less supply and elevated demand as the market returned.

Separately, their House Price Index found that Manchester had one of the greatest year-on-year house price increases at 3.9 pc, only slightly less than the 4.3 pc in Nottingham.

Almost two months since the market returned, what do estate agents say about the post-lockdown landscape – and what the future holds for Greater Manchester’s buyers and renters?

a close up of a sign: House prices have increased over the last month© Andrew Matthews/PA Wire House prices have increased over the last month

Ready to buy

Deansgate agency Reside  saw a 51pc increase in signups in June compared to the same time last year, they say.

“There will of course be a few factors at play here,” agency founder and director Anthony Stankard suggests.

“[It could be] a bounce in the market following lockdown or a large number of people on furlough just browsing, but the productivity is phenomenal and the number of deals in both sales and rentals is very promising in these early days of the new normal.”

With house hunters able to do extensive research before viewing a property, Anthony says he has found people ready to buy by the time it comes to a physical viewing.

a tall brick tower with a clock on the side of a building: New Little Mill in Ancoats© Reside New Little Mill in Ancoats

“In normal times our strike rate is one in seven,” he explains. “For every seven viewings, one will result in a deal. Right now, it’s every other viewing so this really is unprecedented.

“We provide virtual tours of all our properties, both rental and sale, and people have pretty much made up their minds before we meet them at the property for a physical look round.

“So, while the actual numbers of people viewing may have gone down, the number of deals has increased.

“Some of it is existing city renters who after three months in lockdown, have decided they want some outside space or a second bedroom or a change of location.”

James Mosedale has worked at the Didsbury branch of estate agency Gascoigne Halman for 11 years and also says they have been kept busy since the market reopened.

“I think there was a lot of pent-up demand from before we went into lockdown,” he says. “We’ve lost very few sales and, for the most part, prices have remained the same.

“We did the biggest sales month across our 21 branches in a few years last week.

“The demand in Chorlton and Didsbury is outweighing the supply at the moment – everyone is getting good prices because there’s so much demand.”

a bench in front of a brick building: There's been demand for properties outside the city centre, such as homes and apartments in Didsbury© Gascoigne Halman There’s been demand for properties outside the city centre, such as homes and apartments in Didsbury

Contradicting Zoopla’s claim, Nationwide suggested that annual house prices in the UK had fallen for the first time since 2012 – dropping by 0.1pc compared with June last year.

But James Mosedale from Gascoigne Halman says he hasn’t seen that happen yet and houses in his area continue to sell within the £200-500k range as before lockdown.

Nonetheless, the UK economy is undoubtedly in stormy waters.

“The proof will be when furlough ends,” James adds.

“That’s when we will probably see the biggest impact.“I think the lockdown wasn’t quite long enough to really take its toll but I think that as furlough is coming to an end, more houses will come on the market as, sadly, some people won’t be able to keep them.”

A summer flight to the suburbs

Brett Howarth, an estate agent at Yopa, says he has seen ‘absolutely incredible’ sales in areas like Bury and Prestwich where he operates.

“We would normally see a dip towards July or August but that’s something we will not see this year,” Brett says.

a stove top oven sitting inside of a kitchen: There has been demand for properties outside the city centre, such as this home in Bury© Yopa There has been demand for properties outside the city centre, such as this home in Bury

“I predict it’s going to be the greatest July and August for housing transactions I’ve ever seen just because of the loss of the summer holidays.”

He believes that with the cancellation of family holidays, trips abroad and other big events, some people might have found themselves with more money than they would have planned for.

“There’s definitely a push for living away from the city,” he adds.

“We’re already seeing the trends of people gradually moving further and further out of the city.

“The bottom end of Bury, which is almost Ramsbottom, is really popular at the moment as the commute into town isn’t that far.”

For Brett, houses are currently selling over their asking prices. He recently sold a house on the market for £300,000 in Prestwich for £312,000.

In fact, he can’t sell quick enough. Three properties in the area were recently sold within days of landing on the market.

“Demand is definitely outstripping supply,” he says.

“There’s more buyers than properties. Buyers coming to the market now are just choosing to spend more money, they’re outbidding each other.”

So, what exactly does this all mean? With prices dipping in some places and rising in others, it all can get a little confusing.

Brett suggests that people shouldn’t use recently-released facts and figures as their only bit of research.

“You have to realise this situation has changed the world in ways we don’t think about,” he adds.

“It has made people reflect on their lives. What was important to them before lockdown might be completely different now.

“Some people have realised they live too far away from family, want a bigger home or realised they don’t need a house as big as they have.”

a living room filled with furniture and a large window: Clippers Quay© Grainger plc Clippers Quay

He says he has heard from clients selling their house because the lockdown has made them reevaluate things.

He says one elderly couple recently decided to move from Bury to Norwich to be closer to family, a move they had originally planned to do in five years’ time.

Mary-Ann from Ringley believes working from home has allowed employers and staff to realise how easily it can be done, and that this will also have an impact on development moving forward.

“We’re seeing just how demand is changing,” she explains.

“It’s been proven that a lot of people can work from home successfully. People living in the city are beginning to push away as they find bigger or better quality houses outside of the centre.

a living room with a sink and a window: More people will seek properties with office space that are ready for working from home© Yopa More people will seek properties with office space that are ready for working from home

“They no longer need to spend an hour and a half commuting to work – everyone’s attitudes are changing.

“That’s also reflected in what homeowners want. There will be a big focus on home offices, study spaces, and outdoor areas. Housing demand is shifting towards that new era.”

‘Rent is going to have to come down’

Mary-Anne Bowring, group managing director of Ringley, who has over 12,000 properties under management in London and Manchester, says they were already seeing people leaving the city centre before lockdown.

“Take London for example,” Mary-Anne says. “I’d say around 25 pc of young professionals who would be sharing properties have left London in order to furlough with their families.

“Central London has felt like a ghost town, even before lockdown. Very few people are travelling and that’s had an impact on tenancies coming to an end and has put a downward pressure on rent.

“That’s something we’ve seen replicated through other cities and is most acutely noticeable in Manchester.”

Property writer David Thame says Manchester city centre has a surplus of high-end apartments.

“The land prices and the cost of building in the city centre are very high so developers wanting to make a decent profit have focused on the high-end of the market,” David says.

“The effect of that has been that the city is slightly oversupplied with high-end apartments, which is going to come to an abrupt halt as there’s simply too much luxury stuff.

“What we’re going to see over the next few years is that rent is going to have to come down to align with the average wages.”

Agency Reside has already started to see decreases of around 10pc in rental prices.

A two-bedroom apartment in Castlefield previously listed on their website at £1,250 a month is now listed between £1,100 and £1,150.

Similarly, a three-bedroom apartment in MediaCity has dropped from £1,200 a month to £1,050.

There are potential drivers for the rental demand in the city centre, however.

“We are getting a lot of inquiries from people living on the edge of the city who previously commuted in but don’t feel comfortable doing that and want to be closer to work,” Reside’s Anthony Stankard says.

“When you factor in travel costs and time saved together with the amenities on offer and the more affordable rent, it can make sense.”

Anthony predicts rental price reductions will stay for the rest of the year before creeping back up at the start of 2021 and returning to pre-Covid levels in the spring.

a cat sitting on a sofa: Grainger plc, who own Clippers Quay, expect more people will decide to rent over buying© Grainger plc Grainger plc, who own Clippers Quay, expect more people will decide to rent over buying

Meanwhile, Jonathan Pitt, director of lettings at Grainger plc, which owns Clippers Quay, the largest Build to Rent scheme outside of London, says economic uncertainty and tighter mortgage restrictions by banks could put many people off buying, supporting the rental market.

“For the rental market, things have been much more resilient throughout lockdown and we have seen a much quicker bounce-back,” he says.

“We think the increase in rental demand will continue for some time, as people are more likely to rent rather than buy during a downturn and a period of economic uncertainty.”

Jonathan from Grainger expects apartment buildings with on-site amenities to grow in popularity as working from home becomes the ‘new norm’ for many.

“Most of our developments have some dedicated workspace provided on-site alongside a gym and communal areas such as residents’ lounges and games rooms,” he says.

“The ability to access everything you need under one roof, and having access included in your rent rather than charged separately, we believe will prove hugely appealing post-pandemic as more people work from home.”

Why the stamp duty cut doesn’t help first-time buyers

a woman standing in front of a computer: The stamp duty changes don't offer a great deal to the young© PA The stamp duty changes don’t offer a great deal to the young

When Open Property Group released their house price Affordability Index at the beginning of June, they predicted that property prices would need to fall by an average of 37pc across the country in order to be affordable for a single person on an average income.

As lower interest rates result in lower mortgage borrowing costs, some people might find the next few months to be a great time to buy a home.

However, low interest rates hit savers – impacting people’s ability to build funds to buy a home.

Earlier this week, the Chancellor of the Exchequer announced changes to the stamp duty tax system. Previously, homebuyers in England and Northern Ireland would pay stamp duty on property sold for £125,000 or more.

That threshold has now increased to £500,000 and will mean that people buying property below that level before March 31 will be exempt from paying stamp duty.

a group of clouds in the sky: Clouds over Stockport, seen from Werneth Low© Manchester Evening News Clouds over Stockport, seen from Werneth Low

“It’s a great idea and only logical to introduce immediately as otherwise it would have stalled everything for three months,” Anthony Stankard adds.

“To run it to next April rather than the end of this year gives it longevity and will help people plan and make sensible decisions.”

He says that on an average sale price of £275,000, the changes could save normal buyers around £3,750. Buy-to-let investors could save around £12,000.

However, the changes won’t make much difference to first-time buyers as they are already exempt from paying stamp duty on properties £300k or below, Anthony points out.

“It will not have a massive effect on first-time buyers, which is probably the most active and most important sector right now,” he says.

“The Help to Buy Scheme on new build homes is probably more important than a stamp duty holiday.

a view of a city at sunset: Broadside in Ancoats© Reside Broadside in Ancoats

“Second time buyers will have a big incentive, depending on where their next step up the property ladder comes.

“This includes downsizers and we are still seeing a number of these buyers selling up in the country to have a home in the city.

“Selling a family home at around £700,000 and downsizing to a property without having a big tax bill will be attractive.”

Property writer David Thame says there’s another hurdle for first time buyers.

“There’s quite a lot of supply in central Manchester and mortgage money is quite cheap at the moment,” David adds.

“The difficulty is going to be that a lot of first time buyers who were hoping for 95pc mortgages aren’t going to be able to get them because the lenders have just withdrawn them from the market.” 

Meet the new normal, same as the old normal?

Nonetheless, David Thame says he doesn’t expect the current situation to have many long-lasting impacts and he believes things will carry on as normal in the near future.

“I think we’re being, in the best possible sense of the word, hysterical at the moment,” he says.

“The Government has scared people so all kinds of the economy have gone a bit wobbly but I don’t think Manchester is going to be any less popular. We just need people to recover their right minds.

“People will ultimately come to their reason about this, it’s not going to change the way the world works.

“The new normal will very much look like the old normal, the trouble is it’ll be 18 months whilst people get used to that idea.”

He says that those already in a position to buy property should consider the current market.

If you have the money to act and you see something that is genuinely and seriously a long-term proposition, now is probably a good time to buy,” he adds.

“For everyone else, it’s probably worth waiting until the world recovers back to its senses.”

Source: Manchestereveningnews.co.uk

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