Having worked on the border of Manchester and Salford for the last 16 years, the landscape from the office window has grown vertically to the point that hardly any sky is now visible.
Jobs created in financial services have driven demand for city centre living, but Manchester is also a hotspot for highly volatile work such as the “Gig” Economy and flexible contracts of employment.
A recent poll by the Royal Society for the encouragement of Arts, Manufacturers and Commerce (RSA) found that:
- 48% of young renters across Greater Manchester had to cut back on essentials (food and drink etc) to cover housing costs compared with 33% across England.
- 6% of young people worked in zero hours contracts or the “gig” economy.
Manchester has a larger than average private rented sector and a waiting list of 13,000 for social housing.
As a result, the private rented sector has responded to the demand by delivering more high rise accommodation for both Buy to Let and Rent to Buy.
Despite the increase in private rented accommodation, Manchester city centre rents have continued to increase and now average £1,000 per month with a high proportion of young renters sacrificing essentials to cover housing costs.
There has been much talk of rent capping in Manchester City Centre to help workers in the “Gig” economy and people on fixed term contracts, which are commonplace in universities, of which Manchester has three.
Rent capping has been implemented in San Francisco and Berlin with mixed results.
Capping rents in certain areas could result in Landlords deciding not to rent out the property causing a reduction in supply and contributing further to the housing gap.
In San Francisco the result was that whilst people living in rent-controlled areas benefitted from lower rents, this was more than offset by new renters paying higher rents in non-controlled zones.
So the risk of introducing rent caps in defined areas is that supply of accommodation could contract with rents outside these zones increasing.
Whether Rent Capping is appropriate in Manchester is still open to debate.
However, past experiences of other cities would suggest that it could be effective as part of an overall housing plan which includes delivering an additional supply of homes.
