The Manchester housing market has become something of a contradiction. On paper it has excellent affordability, in spite of the city’s rapid population growth. In fact, this is one of the reasons why increasing numbers of young people from London (and the surrounding areas) are flocking to the city.
At the same time, however, increasing numbers of Manchester locals, especially young people, are now finding themselves struggling to find homes they can afford. This issue has now become so serious that there have been suggestions that the city should be given the power to introduce rent caps, as Scotland already can.
Affordability means different things to different people
Average house prices in Manchester are currently around 7 times average earnings, which is lower than the average for England as a whole and way lower than London where house prices are, on average, far and away the highest in the country, not just in absolute terms, but in comparison with average earnings.
What this means in practice is that people who are on slightly above-average earnings, like skilled young professionals, have a reasonable chance of being able to buy their own home in Manchester (especially if they buy as a couple) whereas they would never have stood a chance of buying their own home in London (even buying as a couple).
Mark Burns from Manchester Letting Agents Indlu said: “People who are on average earnings still have the possibility of buying their own home, at least if they buy as a couple, but people who are either not on average earnings or not on regular earnings find that, for them, Manchester’s affordability is, essentially, an illusion.”
Lack of housing affordability can have a serious impact on a person’s life
According to a survey by the RSA (Royal Society for the Encouragement of Arts, Manufactures and Commerce) commissioned by the housing association One Manchester, no fewer than 48% of young renters across the Greater Manchester area had been forced to cut back on essentials to cover their housing costs. This figure is 15% higher than for England as a whole.
Manchester is also seeing increasing numbers of rough sleepers.
According to official figures, Manchester had only 7 rough sleepers in 2010 as compared to 123 in 2018. This is enough to point to a problem, even without questioning whether or not the city has accurately counted the rough sleepers (given that many of them may try to hide so as to protect their safety) or noting that the figure only refers to street homeless rather than the “hidden homeless” or insecurely housed.
One way or another, housing has to be made more affordable
Given the figures mentioned above, there really can be no dispute that something has to be done to help Manchester’s lower-earners.
This isn’t just a matter of ethics, Manchester’s economy requires input from these people just as much as it requires input from skilled professionals. Because of this, it might be reasonable to implement rent caps, at least as a short-term measure.
It is, however, worth remembering that this is an untried solution. Scotland has the power but as yet has not really used it. That being so, it may also be worth looking at other options, such as moving to curb the short-term lettings market.
