Back in 2003 the proportion of home owners in Manchester was 72%. Today that figure has fallen to just 58% so what’s going on and why is this good news for property investors in the city?
Data like this can often be written off as a statistical anomaly that will correct itself once whatever is causing the problem disappears. Except the dramatic decline in home ownership is not just confined to Manchester.
Leeds and Sheffield have also seen equally dramatic falls as has London where property prices continue to rise beyond the reach of anyone but the highest earners in the city. Herein lies the biggest clue to the real reason why people are struggling to get on the housing ladder.
Back in 2003 conditions were very different to what they are today. The early part of the decade saw the rise of 100 and 110% mortgages and loose lending that enabled virtually anyone with paid employment to jump on the housing ladder.
Now most banks demand a sizeable to deposit on a property and this has made it far more difficult to save as well as earn enough to qualify for a mortgage in the first place.
The average salary in Manchester is little more than it was back in 2003 at £25,000 per annum. The suspicion is that many are working for much less and this will severely hamper their ability to gain a mortgage on a property worth buying.
Often the only sensible option for a young professional living in Manchester is to rent and this will only increase demand for rental property, particularly in areas close to places of work.