Headline news from Q3 2022
- Energy-efficient homes sell for 16% more
- Manchester tops the chart with the highest annual rental increase in the UK at 23.4%
- A new £105m government hub in Manchester’s city centre
The topic on everyone’s mind right now, and often the topic of conversation, is the cost of living. Fueled by inflation, interest rate rises and increasing energy costs, more so than ever has ‘energy efficiency’ been so high on both property buyers’ and tenants’ criteria when selecting their home. It is no wonder that energy efficient homes are selling faster and averaging higher sales prices of 16%, according to RightMove.
This significant difference was seen on properties with an EPC rating of C, versus properties rated F. Likewise those rated B on average sold 7 days faster than those rated G. So what is an EPC rating? Standing for Energy Performance Certificate, it was introduced in 2007 by the EU, and never more so than now is it playing such an important role in buyers’, investors’ and tenants’ decision making. Rating A is the best score, with G being the lowest. The government’s Clean Growth Strategy, set in 2017 sets out their ambition of most homes being rated C or better by 2025.
As you’d expect, new homes tend to carry a better EPC rating, offering better insulation as well as incorporating a number of energy efficient systems. In the year up to September 2021, 84% of new properties received a rating of A or B, in contrast to existing properties of which 58% carry a rating between D-G (Home Builders Federation).
Rental rates in the UK have grown by 11.5% in the year to June 2022, the highest annual increase in 16 years, according to RightMove. Topping the table is Manchester, which saw an increase of 23.4% in the same period, with Liverpool coming in third at 19.4%. It comes as no surprise after Manchester recently took the position of most liveable city in the UK, once again.
The increase in rental rates being achieved is simply a matter of supply and demand. With fewer properties being available, 26% compared to last year, and an increase in demand from tenants, competition to secure a rental property remains fierce. With the increase in interest rates pushing up mortgage payments, it is only anticipated to continue in one direction, as more residents are pushed into the rental market while the prospect of a mortgage is too expensive and out of reach for many more as the pressure on household budgets intensifies.
UK property prices have continued to rise at staggering rates with an average increase of 15.5% in the year to July 2022 (ONS). Once again, this average was significantly outperformed by Manchester’s City Centre, which saw an increase of 27% (Zoopla). The strength of Manchester’s market is underpinned by the continued increase in the population, as the city continues to gain in popularity and more jobs become available. A new government hub was recently announced, signing a 25 year lease on the First Street building in the heart of Manchester the office will be operational by 2025.
Spread across 130,000 square feet, the space will house 2,500 civil servants, with 700 of the positions being relocated to the city from London. A further 1,800 civil servants are expected to be relocated to Manchester over the next 3 years as part of the government’s ‘North Shoring’ plans, decreasing the number of positions in London. The move is forecast to generate £31m in economic benefits for Manchester, from housing to the daily spending of staff. The deal has been funded by Pension Insurance Corporation who put £105m forward for the deal.
With more people choosing to call Manchester their home to enjoy the culture, diverse community and ever increasing employment opportunities, demand for housing continues to grow and with low stock levels, the rents being achieved on residential properties continues to be pushed up. As an example, we have recently re-let a one bed apartment in The Press building at a rent level 9.5% above the previous tenancy just one year ago.
We need more stock! Do you, or someone you know, have any properties in the Manchester area? Through intellectual and dynamic management we can maximise your asset’s profitability. Last month, both our commercial and residential teams passed their health and safety ISOH qualification, in line with our pledge to keep your assets safe and compliant in an ever changing regulated world.
We have a waiting list of tenants looking for properties in Manchester city centre so if you do, please get in touch. We are pleased to offer a referral fee for any new management instructions that sign up for 1 year’s full management with us of £150 for a 1 bed and £250 for a 2+ bed. Just contact: firstname.lastname@example.org
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We’re pleased to announce that we have agreed terms with Sony, who will be leasing the whole of our 70,000 sqft commercial development in Liverpool, Duke & Parr – the largest deal in the city since 2019. Located in the heart of Liverpool’s buzzing Ropewalks neighbourhood, we completed an extensive 2 year renovation of 4 adjoining buildings in 2021 – including a grade II listed former library – combining the spaces and sensitively bringing Duke & Parr into the 21st century, meeting the demands of modern working while maintaining the history and heritage of this iconic building.
Also in Liverpool, terms have been agreed with a new bar and music venue operator at the Elevator Studios. This is at a 20% increase in annual rent from the previous tenant – testament to the success of Elevator Studios and the community that has been created. Video gaming publisher, Wushu, another tenant within Elevator, is also seeing their business thrive and is expanding into a further 2,500 sqft in the building, to accommodate a 150% increase in the number of employees since 2020.
In Manchester, an additional 1,200 sqft on the ground floor of Hilton House is being fitted out to be operated as a bakery. Operating in conjunction with Feel Good Club the bakery will offer daily fresh bread and takeaway lunches, as well as supplying the Feel Good Club for their in-house dining.
Developments & Construction
As the cost of living is at the forefront of tenants’ and home buyers’ minds alike, developers are working on ways to ensure new homes answer to these expectations and deliver the efficiency and thermal properties being sought. With this in mind, our design and development team have been going above and beyond in seeking innovative energy saving systems and incorporating them into our properties.
Alongside the ‘traditional’ solar panels, heat recovery systems are also being introduced, which capture waste water, for example from the bath/shower or kitchen sink, and use this energy to heat fresh water in the tank or the property itself. While saving the occupier money, it also helps reduce their carbon footprint. By the nature of construction, reducing the environmental impact of our buildings is something we are particularly conscious and passionate about. We focus on procuring materials from UK suppliers, where possible, reducing carbon emissions from the transportation of goods, as well as supporting local business, and are committed to meeting Manchester City Council’s target to be net zero carbon by 2038 and our own additional goal of being net zero waste by the same timescale.
New development launch: Osborne Yard
Osborne Yard is a new development within Manchester’s Victoria North regeneration zone. It will be home to 90 spacious apartments as well as 2 communal gardens. The top floors will boast some of the greenest views in the city, with all 90 apartments featuring vast living-and-dining rooms that open onto floor-to-ceiling windows & Juliet or private balconies overlooking the city. Not forgetting energy efficiency being a key priority for residents, the development has been designed to be 38% more efficient than government building regulations, making them some of the most energy-efficient homes in Manchester city centre. Launching Q4 2022, register your interest here.
Construction continues to progress well at the Brunswick Street site, with a renewed focus on the ground floor which will offer extensive amenities to future tenants. Going far beyond your typical buy-to-let scheme, SONA will provide an adaptable space for socialising, co-working, community events and fitness.
Royal Canal Works
Royal Canal Works continues to progress at a rapid speed. The groundworks have now been concluded for the apartments, with the piles and ground beams completed along with the drainage works and road to service the apartments now built. The team is ready for the steel frame which is due to start arriving on site mid-October, when it will begin to be erected.
Are you listening and staying up to date?
After the launch of our podcast in May, the 5th episode has recently been released. The series covers a range of property-related topics, catching up with expert guests from asset managers to mortgage brokers, to help you gain a deeper understanding of the property industry. It’s not too late to catch up – listen to all this and keep up to date with the latest property news below:
The Greater Manchester Combined Authority has announced that its long-term plan, Places for Everyone, has moved into its next phase. Insider Media.
Rightmove published its July House Price Index report, Rightmove.