City focus
Manchester: A city of first time buyers
CITY FOCUS
Manchester
A city of first time buyers
Executive
summary
higher proportion of mortgage
lending in Manchester goes to
first time buyers than in any other
English city outside London, with half of all
mortgages going to first time buyers. Taking
into account those buying in cash, over a
third (35%) of houses are bought by first
time buyers. In 2013, new buyers put down
an average deposit of £26,000, an increase
of 13% from 2012. The largest deposits
were put down by first time buyers in South
Manchester, most notably in Sale and
Chorlton, where the average deposit stands
at £44,000. Manchester’s popularity with
first time buyers can be attributed to the
decline in the number of houses being built
between 2003 and 2011 in neighbouring
Cheshire and Lancashire.
A
Those first time buyers in Manchester
who don’t get onto the housing ladder
by the age of 35 are increasingly living in
the private rented sector. The number of
rented properties has grown most quickly
in areas where the oldest first time buyers
are found. The 19 postcodes where first
time buyers are older than average saw
the private rented sector expand 140%
between 2001 and 2011 compared to an
increase of 89% across England.
Broughton
Highest proportion of
mortgages going to
first time buyers: 69%
Little Hulton
Smallest average
first time buyer deposit:
£9,000
Northern Quarter
M38
Youngest first
time buyers:
Average age 28
M7
M4
M12
M21
Longsight
Oldest first
time buyers:
Average age 38
Chorlton
Largest average first
time buyer deposit: £44,000
www.countrywide.co.uk
CITY FOCUS
Manchester
A city of first time buyers
The first time
buyer capital
Research by Countrywide plc shows Manchester has the largest proportion of mortgage lending going to first time buyers
compared to anywhere else in the country
outside London. 50% of all mortgage
lending in the city goes to first time buyers
which means that once those buying in
cash are accounted for, 1 in 3 houses
(35%) is bought by a first time buyer. An
improving housing market has translated into the number of first time buyers
growing at twice the rate of homeowners.
In 2013 there were a total of 10,000 first
time buyers in the city. While significant,
this compares to 20,000 first time buyers
getting onto the housing ladder in 2007.
Proportion of mortgage lending
to first time buyers
Source: Countrywide plc 2014
Postcodes with the largest
proportion of mortgage
lending to first time buyers:
M7
BROUGHTON
2.
M19
HEATON CHAPEL
66%
3.
M50
SALFORD QUAYS
66%
4.
M6
PENDLETON
65%
5.
M14
FALLOWFIELD
More than 60%
55% - 60%
50% - 55%
45% - 50%
69%
1.
62%
Less than 45%
1 3
IN
houses is bought by a
first time buyer
The most popular locations for first time
buyers are the 12 postcodes which encircle the city centre, accounting for just
over half of all purchases by new buyers.
Smaller Victorian terraces with excellent
transport links into the city centre attract
first time buyers and students alike.
In the more affluent suburbs of South
Manchester, sales to first time buyers
comprise a much smaller proportion of
transactions. Around 40% of mortgage
lending is to first time buyers, with the
www.countrywide.co.uk
majority of lending going to upsizing
second and third time buyers looking for
a larger property and more green space.
Those new buyers who do decide to live
in Chorlton (M20), Didsbury (M21) and
Sale (M33) put down the largest deposits, paying an average of £157,000.
This is a premium of 34% above the
£117,000 paid by the average first time
buyer in Manchester.
CITY FOCUS
Manchester
A city of first time buyers
Linking age,
price and
tenure
The average first time buyer in Manchester is 32, the same age as the average
first time buyer nationally. The youngest
first time buyers tend to purchase in some
of the most expensive areas, predominantly in the city centre (average age 29),
attracted by the lifestyle and the number
of new developments marketed specifical-
ly at first time buyers. Such areas require
some of the largest deposits. The Northern Quarter (M4) is home to the youngest
buyers in Manchester, yet the average
first time buyer puts down a deposit of
£38,000, the third largest in the city.
Average age of first
time buyers
Source: Countrywide plc 2014
OLDEST
AGE
1.
M12
LONGSIGHT
38
2.
M18
GORTON
37
3.
M50
SALFORD QUAYS
36
YOUNGEST
1.
M4 NORTHERN
QUARTER
28
2.
M26
RADCLIFFE
29
3.
M3 CITY CENTRE
& DEANSGATE
29
Older than 35
34 to 35
32 to 33
30 to 31
Under 30
TO LET
Older first time buyers are relying on the
private rented sector for longer before
making their first purchase. The expansion
of the private rented sector has been largest in areas where the oldest first time buyers are found. In the 19 postcodes where
the age of the first time buyer is older than
average, the number of households in the
private rented sector grew 140% between
2001 and 2011, 30% more quickly than
the 23 postcodes where first time buyers
were younger than average.
www.countrywide.co.uk
The lowest house prices and the oldest
first time buyers are found to the North
East of Manchester, in areas where a
large proportion of households live in the
private rented sector. In M18 (Gorton) the
average first time buyer is 37 and 30% of
all households live in the private rented
sector. Between 2001 and 2011 the proportion of privately rented households in
M50 more than tripled, the largest expansion of the private rented sector anywhere
outside the city centre.
CITY FOCUS
Manchester
A city of first time buyers
Proportion
of households
living in
the private
rented sector
Source: ONS 2014 and Countrywide plc 2014
2001
2011
More than 20%
15% to 19%
10% to 14%
5% to 9%
Less than 5%
Manchester in a minute
1
Source: Countrywide plc 2014
& ONS 2014
In 2013, price growth has
been strongest in Central
and Southern Manchester
Less than 0%
POSTCODES
WHERE
PRICES HAVE
FALLEN
0% - 2%
2% - 4%
More than 4%
12 month HPI growth
POSTCODES WHERE
PRICES HAVE RISEN
IN 2013
More than 6%
4% to 6%
2% to 4%
0% to 2%
Less than 0%
90%
7.6
BUYERS TO
EACH SELLER
IN Q1 2014
9.2
80%
60,000
Jul 13
Oct 13
Jan 13
50%
51,000
29,000
Apr 13
Jul 12
Proportion of mortgages going
to first time buyers (2013)
2001
2013
Oct 12
Jan 12
Apr 12
Jul 11
Oct 11
Jan 11
2007
Apr 11
Jul 10
Oct 10
Jan 10
Apr 10
Jul 09
Oct 09
Jan 09
Apr 09
Apr 08
70%
Jul 08
75%
Liverpool
Transactions
remain below the
long run average
BUYERS TO
EACH SELLER
IN Q1 2013
85%
Leeds
Manchester
3
95%
Jan 08
Newcastle
upon Tyne
100%
Oct 08
Prices have
recovered
more quickly
than in other
northern cities
PERCENT OF PEAK PRICE
2
Taking into account cash purchases
and one in three sales is to a first
time buyer (2013)
35%
www.countrywide.co.uk
Over the course of 2013,
prices rose in 40 out
of the 42 Manchester
postcodes by an average
of 3.6%. Price growth has
been led by the City Centre and South Manchester
with prices in M2 and
M20 rising 6.1%.
The number of buyers
competing for each property coming onto the market has increased, driving
house price growth.
By the end of 2013 this
growth has meant prices
are now 18% below their
peak compared with 22%
at the end of 2012.
While first time buyers
account for half of all
mortgages and sales,
transactions remain
around half the 2000 –
2007 average leaving
many first time buyers
struggling to get onto
the housing ladder.
CITY FOCUS
Manchester
A city of first time buyers
80%
60%
40%
20%
2013
2012
2011
2010
2009
2007
2008
2006
2005
2004
2003
2002
2001
1999
2000
1997
1998
1996
1995
1994
1993
1992
1991
1990
0%
1989
Source:
ONS 1985 -2013
100%
1987
Lancashire
Planning permission granted only
in special circumstances in parts
of Cheshire and Lancashire
120%
1988
Cheshire
downward trend in house building in the
region. Between 2003 and 2011 planning
permission for new development was
granted only in special circumstances in
parts of both Cheshire and Lancashire
meaning that house building slowed
substantially while continuing apace in
Manchester. As a result, first time buyers in
areas surrounding Manchester headed for
the inner city where new stock was available and affordable.
House building reaches the
highest level across England
and the North West since 1977
140%
1986
Manchester
With around half of all mortgaged new
build property sales nationwide going to
first time buyers, the strong performance of
the Manchester new build market relative
to surrounding areas has provided large
amounts of housing attractive to first time
buyers. While the downturn in 2007 saw
house building in Greater Manchester fall
by 65%, the decline in new construction
in neighbouring Cheshire and Lancashire
has been larger and reflects a longer term
1985
Manchester
has been
building more
homes than
its neighbours
HOUSE BUILDING AS A PERCENTAGE OF 1985 RATE
Why
Manchester?
View from the streets:
Mark Alcroft, Managing Director of Bridgfords
The 1996 IRA bomb proved to be a catalyst for the regeneration of central Manchester. In the following 10 years
significant amounts of investment poured in to transform
the city centre. Between 1997 and 2007 house prices in
the city centre increased 160% with a large proportion
of sales achieved off plan. The downturn in 2008 hit the
centre particularly hard and a significant number of developments collapsed uncompleted. City centre markets
remain slow, with some who bought immediately prior
to 2008 in negative equity. There are signs in early 2014
however that the Help to Buy Mortgage Indemnity scheme
has started to drive transactions in the city centre back
towards pre-2008 levels.
For now the focus of the Manchester market has shifted
eastwards and southwards from the city centre. A moratorium on new build development across a number of neighbouring local authorities has increased the attractiveness
of Manchester to first time buyers unable to find smaller,
affordable property. New buyers have been supported by
a flourishing tourism industry, Manchester being the third
most visited city in the UK after London and Edinburgh.
The rapid expansion of the Metrolink system into South
and East Manchester has significantly improved access
into the city centre. To the East, the Metrolink extension to
Ashton has coincided with the Sharp project which provides space for TMT start-ups. Manchester now houses the
largest cluster of creative and technology businesses in the
UK outside of the capital. Further south and Wythenshawe,
a 1960s urban extension, will benefit significantly from the
improved connectivity.
Looking to the future and this southern extension of the
Metrolink will connect Manchester Airport to central
Manchester, coinciding with the development of a £650
million Airport City. It will provide 1.4m ft² industrial space
and a further 1m ft² of office accommodation.
www.countrywide.co.uk
CITY FOCUS
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