JLL’s Big Six Residential report offers a housing market comparison across six leading UK cities outside of London. In terms of five-year forecasts, Manchester’s property market is leading the UK, followed closely by Birmingham in second place.
The report, which looks at factors including sales activity, property prices and rents across Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester, has made some big predictions for the upcoming five years.
Spanning 2023-207, the 5-year sales forecast for Manchester is expected to be 19.3%, while Birmingham sits just below at 19.2%. However, when it comes to expected rentals, Manchester leads the way with growth predicted at 21.6% compared with Birmingham’s lesser 19.3% 5-year rental forecast.
We explore what’s driving demand in these top cities.
Manchester Leads the Way
Showing high demand alongside fast recovery, Manchester was the first city of the big six to record double-digit growth after the pandemic, indicating its ability to bounce back when the property market stumbles.
In June 2021, the JLL Cities Index reported a remarkable annual growth of 12.6%. Subsequently, prices have continued to rise, albeit at a more moderate pace. As of December 2022, prices increased by 4.9% over the year. However, due to the consistently high demand for housing in Manchester, the city stands out as a top performer over the past three years, with prices soaring by an impressive 21.8% since the end of 2019.
Looking at the lettings market, Manchester is absolutely leading the way when it comes to current and predicted growth. The annual rental growth in 2022 rose to a huge 22% as demand from tenants continued to rise in this popular city. And it doesn’t stop there; JLL’s forecast predicts a further 21.6% rise over the next five years.
Birmingham Welcomes Robust Growth
Taking the second spot when it comes to growth predictions, Birmingham has still seen strong growth in the past year.
Over the past five years, the city has witnessed a robust increase in property prices, particularly two-bedroom flats, which are now 27% higher compared to the end of 2017. Since June 2021, the average annual growth rate has been around 5%, resulting in values that are now 10.5% higher than pre-pandemic levels.
When it comes to new build properties, the average price for a one-bedroom flat reached £200,000 by the end of the year. Meanwhile, two-bedroom flats saw prices rise to £280,000, and three-bedroom flats reached a price point of £360,000. In the prime new build segment, one-bedroom apartments averaged at £280,000, while two-bedroom apartments commanded a price of £400,000.
And the future of the rental market looks fairly rosy too. While not scaling the heights of the demand in Manchester, over the past year two-bed flats showed 20% rental growth year on year.
In addition, Birmingham attracted the most investment of all cities outside of the capital, funding around 1,878 homes for a total of around £380m.
As the popularity of these cities continues to grow, it will be exciting to see how JLL’s UK property market forecasts play out over the next half-decade.
Contact us today for available UK properties.
