It is less affordable to rent in Manchester than it is in some parts of Greater London, new figures have revealed.
The average property in Manchester costs £875 a month to rent, according to the latest data from the Valuation Office Agency. The average income, meanwhile, works out at £2,008 a month, before tax. It means that on average, people spend 44% of their income on rent.
That’s the highest proportion of any local authority outside of London and the South. In fact, it’s either equal to or higher than six London boroughs. Hillingdon in West London and Bexley in South-East London have the same rent-to-income ratio as Manchester, at 44%. But Manchester's ratio is higher than four other London boroughs: Haringey (43%), Kingston-upon-Thames (42%), Croydon (42%) and Bromley (41%).
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The rent to income ratio in Manchester is at least eight percentage points higher than any of the surrounding Greater Manchester boroughs. Compared to elsewhere in the north, it is 11 points higher than Leeds, 12 higher than Newcastle, and 17 higher than Liverpool.
In contrast, the boroughs in Greater Manchester with the smallest rent-to-income ratio is Wigan, coming in at 26%, closely followed by Rochdale at 28%. In Wigan the average property costs £550 to rent while the average income before tax is £2, 111. In Rochdale, the average cost of rent is also £550 but the average income before tax is £1,985.
Nationally, Middlesbrough is the most affordable place to rent in England, with properties costing an average of £450 a month to rent there, which is the cheapest in the country. It works out as just 21% of the average salary in the area.
On the opposite end, Kensington and Chelsea is the least affordable place to rent a property in the whole of England. The average monthly rent in the London borough is £2,300, according to the latest figures from the Valuation Office Agency. That’s compared to an average wage of £3,132 before tax. That gives a rent to income ratio of 73%.
See how your local area compares using our interactive map below.
The data comes as Manchester continues to see increasing competition for rental properties, with prospective tenants struggling to find somewhere to live. Influencer Saskia Marriott, 26, discouraged people from moving to Manchester after facing difficulties while finding a new home to rent.
Her previous flat, in Salford, had its rent increased by 50% during the past two years so she sought after a new property to rent. She said she had a good budget, an above-average salary for someone of her age, no pets, no children, and no parking requirements - but still struggled.
She started looking for a flat in early February, and had 25 viewings booked between then and the beginning of March. But she only made it to two, with all the other flats being snapped up before she could even see them.
"I think my flatmate thought I was being dramatic when I told her how much I was struggling," she previously told the Manchester Evening News. "But she's going through it now - she took three days off work and only had one viewing because they all got cancelled. It's ridiculous. It's gone mad."
Saskia did eventually find a flat within her budget and desired location. But she said it was only through advice from a friend in real estate to circumvent online listings and reach out to agencies directly that she was able to find what she was looking for.
Managing director of Reside Manchester, Anthony Stankard, said he sees people coming into the office 'daily' to see what's new, agreeing that by the time rentals go online, they will already have dozens of viewings lined up.
"This situation is unique to Manchester," he told the M.E.N. "I travel to other cities and speak to experts there, and its clearly worse in Manchester than in Leeds, Birmingham, and Liverpool. They don't have the feeding frenzy we have."
Manchester's rental market is experiencing a 'unique' pressure, as delayed construction due to Covid, countrywide economic forces, and huge population growth in the city work together to create a 'feeding frenzy, property experts say'. It's an endorsement of Manchester's desirability as a place to live and work - but for some those on the ground, the situation has become 'ridiculous'.
Gareth Hunt, head of lettings at Ryder & Dutton, said: “I understand that it is difficult for tenants as there has been a sharp increase in rents in all the areas that we cover. This started in 2019 when the Tenants Fee Ban prevented landlords from charging tenants towards the costs of setting up a tenant. As a result, the landlords had increased costs, which they then had to pass on to tenants via increased rents.
“Post pandemic, there has been a strong demand for rental properties, but increased costs for landlords mean some have chosen to sell, whilst sales prices have been high. This means that demand for rented property is very high, but the supply has been low and the increased mortgage rates and costs that many landlords are experiencing is forcing rents upwards."
Meanwhile Anthony says flat-hunters 'shouldn't be fooled' by the sea of cranes on the horizon, with most projects taking at least two years to complete, and demand far outstripping supply. Manchester City Council say they have 'long recognised that Manchester is undersupplied for all types of housing', and have also cited 'lack of supply' among the main reasons for rising rents.
Anthony told the M.E.N that in his 25 years of experience, he has 'never seen anything like the last 12 months'. He said that developers' fears that city centre living would 'collapse' following the pandemic has instead been met with 'the reverse', with a 'huge influx of young professional people wanting to be in the city centre'.
At the same time, Anthony said changes in the financial world meant that build to rent became 'the most desirable asset', with most new developments being forward funded projects built specifically for the rental market. He explained that a lack of private investment and a shortage of second-hand rental properties means more people are being driven into the rental market as there is little stock available to buy.
He also blamed economic decisions laid out in September's mini-budget, which sent markets into turmoil and led to a 10% fall in the number of mortgage approvals during October, for causing an 'absolute meltdown' in the rental market, driving more and more people into renting.
Manchester City Council say over 9,500 new homes are currently under construction in the city centre - but with the population of the city centre forecast to surge from 60,000 in 2019 to 100,000 in 2025, Anthony says the numbers 'don't add up'. "Every time a new office space is created, the demand for homes grows," he said. "If you do the maths, you can see - it doesn't add up."
Councillor Gavin White, Executive Member for Housing and Development, said: "The City Council has built over 22,700 new homes (including 14,300 in the city centre) since 2015 including a peak of 4,260 new homes (including 3,187 in the city centre) in 2020-21.
"Lack of supply is one of the main reasons rents are going up and why some people find it hard to find accommodation – in the city centre in particular. Whilst the residential pipeline does show signs of strength with over 11,000 homes under construction (including 9,500 in the city centre) and a further 11,300 with planning approval (8,950 in the city centre) we know more are still needed.
"That’s why the Housing Strategy commits us to helping sustain delivery of new homes and sets the target of delivering 36,000 new homes including 10,000 new affordable homes by 2032. One of the main barriers to this is an increasingly scarce supply of land. That’s why we’re promoting high-density, tall buildings in key locations on brownfield land, close to transport links, such as Great Jackson Street and at Trinity Islands.
"We’re also looking to maximise opportunities for large scale residential-led regeneration on the edge of the city centre in areas such as Strangeways, the Back of Ancoats and Victoria North and we’re increasingly looking to capitalise on the important role our district centres – such as Gorton and Wythenshawe – will play.
"It’s important to note that this data is restricted to the residential pipeline in Manchester. The 100,000 residents by 2025 figure that Anthony Stankard quotes includes the parts of the city centre in Salford and Trafford. Analysis which matches population growth to new housebuilding in these locations therefore needs to consider residential pipeline activity in those authorities as well, in order to truly capture the full extent of the pipeline across the regional centre in full."
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