Over recent years Manchester has made itself a popular destination for property investors not just in the UK but from all over the world.
For the most part, this has been good news for both renters and residential buyers as competition between landlords has kept down rents and funds from off-plan buyers have allowed property developers to finance the housing developments Manchester needed (and still needs).
There are, however, growing concerns that certain segments of Manchester’s population are being increasingly priced out of the housing market.
Housing affordability in Manchester is still, essentially, good
Even now, after several years of growth, house price estimates in Manchester are better than in England as a whole (average house prices are around 7 times earnings versus around 8 times earnings).
This means that those who are on average earnings or better still have a reasonable expectation of being able to rent within their means and buy at a price they can afford (especially if they do so as part of a couple).
Those on lower incomes, however, are much less likely to be able to do so and may even struggle to be able to afford a place to live and pay their essential bills and other expenses.
The problems faced by lower-income workers are hardly unique to Manchester
At this point, it has to be noted that the problems faced by those on below-average and/or erratic incomes are hardly unique to Manchester and frankly pale into insignificance when compared to the problems faced by their counterparts in London.
That said, the fact that problems are worse elsewhere is not an excuse for failing to address them. This then raises the question of how to do so.
Some form of (local) government intervention seems highly likely
In principle, the Westminster government could follow in the footsteps of the Scottish Parliament and create a system where rent controls were managed locally but supervised nationally.
In Scotland, local authorities can apply to the Scottish Parliament to have an area designated as a Rent Pressure Zone and, if their request is granted, rent controls are then applied to that area.
In practice, the Westminster government has shown no indication of doing this, possibly because England and Wales together are massively bigger than Scotland and have a substantially higher population, which means that the administrative burden of such a scheme would be correspondingly higher.
The local authorities in Manchester (and London) by contrast have expressed strong interest in being granted the powers to levy some form of control over local rents.
As this is currently all just a suggestion, it is impossible to say how this would work in practice and, rather ironically, Scotland does not actually provide a real-world case study since the Scottish Parliament has yet to use its rent-control powers in any meaningful way.
Mark Burns, Managing Director of Manchester Estate Agents Indlu said: “Landlords should make a point of keeping track of any changes in this area and should also look to ensure that their rents are set at a realistic level, i.e. one which takes into account the impact of the tenant-fee ban, in case they find themselves being limited in their ability to raise rents at a later date.”