A combination of high demand and a low supply of properties is pushing a rise in both rental and purchase prices, despite the uncertainty across the UK at the moment.
House prices are set to soar by an average of 18% over the next five years, according to the Manchester Residential Predictions Seminar held earlier this month.
According to property advisor JLL, the property market in key northern cities will be faced with high demand and low supply, resulting in growth in both areas.
In Manchester alone, they are predicting a capital values growth of 28%, the average two-bedroom apartment in the city that now fetches £230,000 will cost around £247,000 at the end of 2017, a 7% increase.
Rents in Manchester are forecast to increase by 20.5% by 2021. JLL said that renters today can expect to pay around £1,100 a month for a two bedroom flat, in Liverpool the average rental price is £900.
This data follows a strong year for Manchester’s residential sector in 2016, during which capital values grew by a whopping 15%.
In Liverpool, where around two thirds of all homes in the city centre are privately rented, and half the population are young professionals rents are set to grow higher, 17% within the next five years.
Leeds is set to see the largest increase in rents of any city across the UK, reaching a 22% growth over the next five years.
Stephen Hogg, Head of North West Residential at JLL, commented;
‘Our five year forecast points to the continued strength of the residential sector in the Northern Powerhouse. Manchester now offers some of the best returns in the UK and is at the forefront of the build to rent market in the UK regions’
According to JLL, Manchester requires 3,300 new homes each year, Liverpool 2,000 and Leeds 2,200.