It was recently announced that the private banking firm Brown Shipley has integrated seven new advisers, 12 support staff and £540 million assets under management in Manchester, following its acquisition of business consultancy firm The Roberts Partnership last year. And it is not the only company funnelling resources into Manchester – far from it. The accommodation group StayCity has opened its second Manchester-based property, and the Guardian is considering a return to Manchester, its original home, to cut the costs associated with London premises.
Coming years after the BBC’s pioneering move to Salford-based MediaCity, these high-profile northern migrations show that the Northern Powerhouse is now an attractive option for companies in the media, finance, legal and professional services sectors. No longer is the North the land of heavy industry and manufacturing; cities like Manchester are developing a strong service economy which is drawing investment from across the UK, and beyond.
Manchester is home to the University of Manchester, which belongs to the prestigious Russell Group of universities, and Manchester Metropolitan University. With approximately 70 per cent of the 30,000-plus Manchester students remaining in the city after graduating (according to Student Map), Manchester has a strong skilled workforce. This makes it an appealing choice for companies seeking university-educated professionals who are well-suited to careers in the service industries, whether that be finance, law, technology, media and so on.
Moreover, it looks like it won’t be too hard for these graduates to find job opportunities in Manchester amid this tide of North-Shoring, whereby commercial interest is shifting from the South to the North of England. While London has operated as the epicentre of careers in the finance and legal districts, it now has stiff competition from the UK’s ‘second city’. In fact, demand for Manchester-based office space in the first quarter of 2017 was driven by companies in the business services, retail and leisure, finance, and media and technology sectors. In the first three months of the year alone, 208,233 square foot of Manchester office space has been acquired by businesses across 73 new deals and, in terms of investment in this market, prime office yields in the city have peaked at 4.75 per cent (as revealed by Colliers’ latest figures).
The first-ever direct flight from Manchester to mainland China took to the skies in June 2016, making Manchester Airport the only British hub outside of London to have scheduled non-stop flights to Beijing. This is boosting Manchester’s potential to become an international centre of commerce, education and research by making it easy for passengers to travel to and from China and the North of England. The time saved by professionals travelling between these two locations – which equates to millions of pounds each year – is another reason why businesses are moving their operations to Manchester.
The direct flight also makes Manchester universities even more appealing to overseas students, all of whom will be in search of good-quality student accommodation in the city. And that’s not to mention the added value that increased tourism is bringing to Manchester, as a result of this investment in Manchester’s international transport links.
What does this mean for housing?
When the BBC moved its headquarters to Manchester, it brought with it in the region of 2,000 jobs. With more and more large companies following suit, the number of jobs located in Manchester is rising swiftly and drawing professionals away from London. As a result, there is an increased demand for housing which underpins the rising value of Manchester’s housing stock. Young professionals are seeking conveniently-located rental properties which has driven a 0.9 per cent increase in the rental value of homes in the North West, which paints a much more positive picture than the 1.2 per cent decline in the rental value of London-based properties (as revealed by the latest Homelet Rental Index).
A high number of professionals and their families are migrating to the North Powerhouse in search of jobs and more affordable housing, having become disillusioned with the sky-high cost of renting in London; the average professional in London currently spends approximately two thirds of their monthly pay packet on rent. As such, now is the ideal time to invest in properties in Manchester, which has scope for healthy returns across the residential, commercial and specialist property sectors.
With a skilled workforce, an airport which connects with more than 200 international destinations, a growing infrastructure and a more competitive cost of living, Manchester is truly rivalling London as a hub of enterprise and investment. As big businesses cast their sights towards the heart of the Northern Powerhouse, new opportunities are emerging for investors to take advantage of Manchester’s growing appeal – and subsequent value.
To find out more about the effects of North-Shoring and how you can make the most of Manchester’s growth by adding a property to your portfolio, get in touch with us here. And for the latest market news and insights, sign-up to our newsletter.