1. MANCHESTER RESIDENTIAL BUSTING THE CAPACITY MYTH

3. To what extent can the Manchester market absorb expected new housing supply in the period to 2025?

5. An emerging residential pipeline
Albeit from a low base
8,950 residential units in Manchester with planning permission expected to complete by the end of 2018/19:
4,825 will be in the private rented sector (54%)
3,610 will be open market sale (40%)
The remainder will be affordable or retirement provision
Headline schemes currently on-site include:
Owen Street (Renaker) – 1,400 units
Circle Square (Bruntwood and Select Properties) – 604 units
Cottonfield Wharf (Manchester Life) – 302 units

6. But completions not expected to exceed 2,000 per annum until 2017/18
Over 3,000 homes started on site so far in 2016/17 – 89% in the city centre
But completions not expected to exceed 2,000 per annum until 2017/18
starts include:
Owen Street Towers A & D (Renaker units)
27-29 Ellesmere Street (Glenbrook units)
The Plaza New Islington (X units)
Sawmill Court Ancoats (MLDC units)

7. Housing market recovering but supply out of sync with demand
54,000 new residents since 2009
Housing market recovering but supply out of sync with demand
Scaled based on the average number of persons per dwelling 2008–2015 (2.07)

8. Manchester’s population set to exceed 600,000 by 2021
96,000 new residents expected across the city between now & 2024

9. City Centre population expected to reach 80,000 by 2024
18-34s remain dominant but 35-49’s becoming a greater proportion over time

11. UNFULFILLED DEMAND SUPPLY
MCC Residential Absorption Forecasting Model An annual demand cycle rotating within a wider market
DEMAND
UNFULFILLED
SUPPLY
Minimum
Household Demand
Total Latent Demand
New Latent Demand
New Homes
Leaving the city
Existing Stock
Leaving the city

12. From 2018 the pipeline comes closer to meeting demand – but the city
remains consistently under supplied by over 2,000 units per annum (1,100 in city centre)
Unfulfilled
demand
The city’s expected residential pipeline
Including sites with planning permission and unplanned sites with potential to accommodate residential development

13. Growing proportion of city centre demand from existing residents looking to stay Aspiring owner occupiers and premium renters ‘locked’ into the entry level market due to constrained supply
Latent Demand
Cumulative build up of demand within the existing population – including hidden or as yet unformed households
Unfulfilled Demand
An annual assessment of housing demand not met by new and existing supply – including households lost to non-Manchester markets and each years ‘new’ latent demand
City centre – Latent Demand from Existing Population v Demand from New Residents

14. Minimum Demand from Owner Occupiers Total Demand from Owner Occupiers
City centre market set to lose over 5,000 potential owner occupier sales by 2024
Absence of supply risks losing owner occupiers to surrounding markets or ‘locking’ people in the rental market
Minimum Demand from Owner Occupiers
Number of homes required for owner occupiers in the city centre to maintain existing levels of demand
Total Demand from Owner Occupiers
Minimum demand from owner occupiers plus latent demand built up within the existing population – most acute within a growing year old city centre demographic
Open Market Sale homes account for only 13% of expected new city centre
supply to 2018

15. Building a quality product for sale & rent will unlock demand & retain residents
Latent demand for city centre mid-premium product – Entry Level fully absorbed by 2020
Opportunity to expand city centre market into surrounding neighbourhoods (Holt Town, Lower Medlock, Collyhurst and Irk Valley) to accommodate quality product for sale and rent
Entry level demand met by secondary market, Salford new build & pipeline of office to residential conversions

16. But still not enough homes to meet demand
Historic undersupply and close to record population growth has created exceptionally strong demand for new housing in the city centre – underpinned by:
High levels of inward migration, over 100,000 domestic and international students & record number of graduates retained - many of whom are choosing to live in the city centre
City Centre population expected to reach 80,000 by 2024
Increasing sharers market - average persons per city centre dwelling increased from 1.96 in 2009 to in 2015
However, circa two thirds of the city’s residential pipeline is as yet unconsented and even if the existing pipeline was delivered to schedule over 2,000 buyers and renters would be lost each year due to lack of supply (1,100 in city centre)
With this in mind significant capacity remains and there are major opportunities for investors and developers to bring forward development in high profile but nevertheless unplanned city centre locations
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