Manchester is a vibrant city with a young population at its heart - some 72% of occupants today are aged under 35 years and 39% of those are living as one person households. The current Manchester city dweller is therefore a perfect fit for the popular Private Rental Sector (PRS) models that have been developed by investors and developers in the UK in recent years.
Across many of our UK cities, the PRS sector remains an elusive investment opportunity. Beyond London, many now look to Manchester as leading the way in this sector, so how has this been achieved?
We recently hosted a roundtable discussion with members from across the development industry in Manchester, and the city council (see full attendance list) where we discussed that a City wishing to encourage the delivery of PRS needs to;
1. Become a Council who is open for business – Manchester City Council understand they need to drive housing growth in the city. Paul Beardmore’s new role as Director of Housing and Residential Growth is testament to this, he told us: “We recognise the need to drive the delivery of housing here, as much as the delivery of commercial space. In 2016 we had a great year but we were still 5,500 homes below the city’s year-on-year target.” Their establishment of Manchester Place to support and connect developers and investors in the process is also clearly a signal to the market of a city open for business.
2. Understand your demographics – Manchester’s current demographics show a high level of under 35s, many living in one person households, making up a good deal of the latent demand for housing. This also however can result in small accommodation, unsuitable for people as they mature and therefore a transient population.
From the city’s perspective it also results in a concentration of Tax Band A accommodation, reducing tax receipts for the council. To develop a ‘city for all’, a city needs to understand their current demographics and therefore market drivers, as well as how they might get to an ideal community structure through incremental steps.
3. Establish a Land Commission – Although only currently a proposition, Manchester’s willingness to establish a Land Commission clearly demonstrates their intent to find, allocate and drive land release within the city for development purposes. With Sir Ed Lister and Gavin Barwell’s backing as well as hopefully that of the new Mayor, this could become a powerful tool in de-risking opportunities for developers and leveraging funding into scheme proposals.
4. Utilise Compulsory Purchase Orders to keep things moving – Manchester’s proactive stance towards driving development has also led to them seriously considering how they might utilise Compulsory Purchase to drive stalled sites. Land owners who are sitting on permitted sites, but waiting for the market to rise to perhaps unrealistic levels, or who continue to procrastinate will be encouraged and, in the end, forced to act through the use of considered CPO powers.
5. Speed of decision – From those around the table there was as a strong sense that the northern cities of the UK are more adept than many of their southern counterparts at turning applications around. From his perspective delivering schemes in Liverpool, Guy Butler of Glenbrook property sees a very different product emerging. “Clearly the market isn’t as hot in Liverpool as somewhere like Manchester, but the Local Planning Authority approach and speed is really not a barrier for me as a developer, But I can certainly perceive a big north/south divide in this regard.” As such our northern cities need to utilise this as another clear signal to the market that they are open for business.
For more, see my next blog, where I look forward and discussing issues and solutions that arise in a city with a maturing PRS sector.
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