The North West region, buoyed by the ‘northern powerhouse’ and the ever-increasing attraction of Manchester as a place to live and work, is going from strength to strength.
It is an exciting time for the local property community, which is riding high in the face of high demand and a wealth of investment and development opportunities. However, there are negative ramifications. Take the Manchester office and build-to-rent markets. Both have been going great guns as far as demand and take-up go, but this has put huge pressure on the supply side.
A shortage of new office buildings has forced occupiers to turn to secondary and refurbished space, which has in turn forced landlords to improve the quality of said stock, but it has also increased rents and narrowed the price differential with new-build to the point that refurbished stock is starting to look overpriced.
Competition is also rife in the BTR market where developers are having to differentiate to stand out in an increasingly crowded market. The flood of new schemes will offer tenants fantastic choice, but there is such a thing as too much choice and many agents fear that the market is dangerously close to overheating.
There are challenges across the wider region, too. Many local authorities are drawing up regeneration plans, but will they all be able to attract the partners needed to deliver them? And what will come of the proposals outlined in the Transport for the North draft strategy? If delivered, transport and infrastructure improvements could have a transformational impact on the region, but who will pay the £70bn needed to deliver them?
The North West market has reached a critical juncture in more ways than one and its performance over the next few months will be telling.
Mia Hunt is Property Week’s market reports editor
Revival instinct – North West focus
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