Sarah Beeny’s online estate agency, Tepilo, looks at why Manchester is one of the UK’s leading property hotspot for millennials.
We hear plenty about millennials and their increasing importance to the property market. This demographic - usually bracketed as those aged 18-35 years old - are the most likely to be renting homes and are also the most likely to be first-time buyers.
Where, though, are the highest numbers of millennials located, and where can the millennial property hotspots be found?
Whether you’re a landlord/investor looking to rent to this booming marketplace or a seller looking to sell your starter home to this demographic, it pays to know where demand will be highest. That way, good rental yields can be achieved. Or, if you’re selling your home, your chances of achieving a good asking price are bound to be higher in areas that are highly sought-after.
New research has revealed that Manchester is one of the UK’s top destinations for millennials. The combo of good transport links, a buzzing nightlife scene, the presence of two world-class universities, and a thriving creative, tech and design sector, makes it particularly popular among highly skilled graduates, students, young professionals and families with young children.
It’s a place of culture, jobs, sport, music, industry and innovation, which means it continues to draw members of Generation Y in great numbers.
What’s more, MediaCityUK in Salford, which is the BBC’s home in the north of England, attracts many young workers, with ‘digital creativity, learning and leisure at its heart’. In other words, it’s easy to see why Manchester and its surrounding areas are such a hub for the younger generations.
The research found that Manchester was the leading city by some margin in the UK regional creative talent market. In addition, data from Hometrack has revealed that Manchester continues to witness the fastest house price growth rate in the UK – at 8.4% per annum, up by 6.3% in the last 12 months.
As well as Manchester, other major UK cities – including Edinburgh, Glasgow, Cardiff, Liverpool, Birmingham, Leeds, Bristol and, more than anywhere else, London – tend to attract high numbers of millennials, enticed by dynamic jobs markets, good transport links, buzzing nightlife, graduate opportunities and a plethora of new-build properties and rental accommodation.
Transport links are set to be greater still in London with the arrival of Crossrail, which is poised to be fully operational by 2019. Crossrail 2 is set to follow, all being well, by the early 2030’s. HS2, meanwhile, would link London, the Midlands and the north of England on a greater scale than ever before once completed. It has, however, been beset by delays and complications and it is unclear when exactly it will be constructed or fully operational. The mere prospect of it, though, has had a positive uplift on prices and demand in places such as Birmingham, Manchester and Leeds.
If you are a landlord, the booming millennials market is definitely one you should consider. Whether it’s student accommodation, house shares for young professionals or more luxury rental homes for those in their 30s, demand for homes from millennials is likely to be high and consistent, especially in major cities.
Homes close to transport links and town or city centres will have the most appeal, as will homes with a contemporary, 21st century look. In certain parts of the country, in particular London, renters are prepared to pay more for rental properties – and the market dictates that prices are higher anyway – which means that higher rental prices can be charged and good rental incomes received.
Even in parts of the country where the average rents are lower – in particular the Midlands, the north of England and Scotland – this can be offset by cheaper investment costs in the first place. In other words, it’s cheaper for landlords/investors to buy up property in the first place, in turn meaning rental yields are less squeezed.
If you are a seller, meanwhile, the millennials marketplace is a good one to aim for if you are a second-stepper upgrading from a starter home to a larger abode. If you are the owner of a new-build property, or one that has recently been renovated to high standards, this will also have considerable appeal to millennial buyers.
As research from CEBR and Legal & General pointed out recently, millennials are the most reliant on the Bank of Mum and Dad to aid them with house purchases. It found that the Bank of Mum and Dad is now the equal 9th largest lender in the country, highlighting just how booming the first-time buyer marketplace really is.
Some £6.5 billion will be provided by the Bank of Mum and Dad in 2017, with 70% of this funding going to millennials aged under 30. Certainly, as a seller, it’s a wise move to target this demographic. High demand means you can pick from a wide range of potential buyers and increase your chances of achieving your asking price or above.
So, whether you’re a landlord or a seller, one thing is for certain – the millennials market is a potentially lucrative one to target your home towards. Even with ongoing political and economic uncertainty – and last week’s hung parliament is just the latest example of this – that demand is highly likely to remain strong.