• Build-to-rent “a crucial pillar” in meeting city’s housing shortfall
• Gerald Eve research suggests up to 40,000 new rental homes needed by 2037
• Maximum BTR pipeline of 9,300 homes shows oversupply fears unfounded
Greater Manchester is facing a rented homes “crunch” as the city seeks to house its growing and increasingly young population, according to the latest primary research from Gerald Eve.
The research found Greater Manchester has underbuilt by a total of 32,200 new homes since 2011 and needs to build a further 164,880 by 2037 to meet demand. With 21% of the city’s population renting in the private sector, it is estimated up to 40,000 new rental homes are required in the next 15 years.
The firms’ spotlight on the Manchester build-to-rent (BTR) market has identified BTR as a crucial pillar in meeting the metro region’s housing shortfall and future requirements, and also finds that fears of over-supply in the sector are unfounded. The current pipeline of BTR schemes either in development or planning stands at just 9,300 homes, less than a year’s worth of the require number.
The primary research, which is in response to the Greater Manchester Combined Authority’s Places for Everyone consultation and uniquely looked into every current and planned BTR scheme in the region, points to a growing population and an increasingly unaffordable housing market as factors underpinning BTR demand in the coming years.
The shortage is particularly acute as inward migration brings younger people to Greater Manchester – who are more likely to rent – and the metro area seeks to retain the talent produced by its world-class universities. It is particularly notable in Manchester and Salford, where the proportion of the population renting is 43% and 27% respectively, with BTR particularly suited to these boroughs as a result.
It also demonstrates that the range of BTR customers – including co-living, professional sharers and small families – gives the sector a large and potential demand pool. It is anticipated that the broadening of the demand to new groups of renters will see the sector move towards a more ‘mid-market’ proposition, in contrast to schemes that have focused on more expensive homes.
Charles Boyes, partner at Gerald Eve, said: “What this research shows is not only the growing requirement for rental properties in Greater Manchester, but also the crucial role BTR has to play in meeting this demand. With a current shortfall of 32,000 homes and a further 165,000 needed by 2037 – up to 40,000 of which will need to be rental properties – BTR is a vital part of the solution.
“The level of investment in the city has prompted some to talk of over-supply, but our research definitively shows these fears to be unfounded. The BTR development pipeline in Manchester shows just 4,000 homes currently under construction and a further 5,300 working their way through planning – that amounts to just a single year of future housing requirements. Especially in the central boroughs, BTR will central to the future success of Greater Manchester as it seeks to attract and retain talent.”
Bobby Barnett, partner at Gerald Eve, added: “The demographics of Greater Manchester create a particularly compelling story. The growth seen in Greater Manchester has made it one of the UK’s successes, but a corollary of this expansion is the need for new homes across the region.
“With the majority of new arrivals to Greater Manchester in younger demographics, the attractions of BTR are obvious. It provides flexibility while bringing life to town and city centres, and is a perfect fit with wider ESG considerations. It is no surprise that Greater Manchester has arguably the UK’s most mature BTR market outside of London.”
View the full report here.