Property slump in Manchester - Any thoughts?

[aidanorourke]

I've done an article on the Eye On Manchester site about the property slump in Manchester, as reported in an article in the Manchester Evening News this week.

Slump in property prices in Manchester - Was it inevitable?

Is it all doom and gloom on the property front? Do developers only have themselves to blame for jumping on the property bandwagon? Is Manchester's residential transformation sustainable, when there are no facilities for children, and people will inevitably move out as they get older and have families? Is it really a bad thing when property prices fall?

[Phil Blinkhorn]

Just another turn in the "cycle" which has been going on for well over 150 years. The media love to build up the stories, relying on people's short memories.

To an old codger like me, the late 1980s/early 1990s negative equity crisis happened only yesterday.

There are people for whom this will be a disaster - those who cannot keep up repayments because they are over mortgaged, those who have to move for work who have to go to a more expensive part of the country and the developers who have forced prices to an unsupportable level, ably aided and abetted by the banks - who will want their money back from developers and buyers alike and will cry foul if those they should have never lent to in the first place can't stump up on demand.

[aidanorourke]

Yes, the economic cycle is a cycle, it goes in waves as some elements act on and react to other elements.

A crisis can also be an opportunity. A crisis can force you to take steps you might not otherwise have taken in order to improve things.

And if house prices are now lower, that means many more people will be able to afford to buy property and they will get more for their money.

If people or companies have got into difficulties, it's not the economic situation that's to blame. It's their own fault for taking unwise decisions and not planning ahead, including for the 'worst case scenario'.

If we were to see a decrease in the number of new apartment developments springing up all around Manchester, I wouldn't be too disappointed.

[Sparkly]

It was going to happen as there are so many similar new builds going up at the same time. I have some sympathy for anyone who had to or wanted to move to the centre and recently bought, as they'll probably be hardest hit, but not a lot of sympathy for people buying up properties in bulk, unseen for investment, creating a shortage, thus bumping up prices further, and creating a build boom, then trying to charge at times ridiculously high rents, leaving a lot of properties empty but still going up up in price for a while, then the inevitable slump.

I do wonder if there's going to be a bump/slump in a few years with people leaving for the 'burbs to start families. I also wonder about the effect the congestion charge might have on inner city living. I doubt we will see the centre become a wasteland again (remember when it was difficult to get a hotel room?), as there are many advantages to living and working there for some people, especially considering fuel costs!

It's a lost opportunity though, with planning allowed for almost every build and little consideration to any form of urban planning or build quality, although I understand there are plans for a new primary school. The green quarter in cheetham hill, which I still call plague pits quarter, looks like a future slum to me, as to a few other high-rise builds just outside the inner ring road.

btw Aiden, what is that concrete just off the Mancunian way? It's been like that for a least a year, with an expensive crane in the middle and no work on it, whilst other properties have gone up around it.

[aidanorourke]

I'm not sure what this site is, what it was going to be or who the developer is. I can try to find out or can anyone shed any light?

[Sparkly]

Originally Posted by aidanorourke

I'm not sure what this site is, what it was going to be or who the developer is. I can try to find out or can anyone shed any light?

every time I go past I notice the crane in the middle. They are very very expensive to hire, so I find it strange it's been there for so long and no work on it.

I've done a bit of browsing and found some info. It apparently was going to be apartments, possibly student accommodation, but has been changed to a hotel to be run by Prima, who own the Stannylands in Wilmslow. here's the planning application from January 08.

Design proposal e-Document - 084948-DSX-0001.pdf

Planning info: http://www.manchester.gov.uk/downloa...ver_Street.pdf

[rgsuk]

Even those people who usually over-hype the property market admit that Manchester has a massive over-supply of new build flats and the general opinion seems to be that many are pokey and poor quality. If you walk round the city centre you can see that blocks that have only been up a couple of years already look quite tatty.

One estate agent alone (RightMove) seems to list more than 75 flats for sale in Beetham Tower.

"DTZ research shows the flat market in Manchester grew from 1,000 in 1997 to 16,200 at the end of 2007. Manchester city centre has around 3,300 units under construction, which will bring the total stock up to 19,500. There are a further 11,300 units in the planning pipeline for the city centre. If these are built, this would bring the total stock to 30,800."

Glut on the landscape - Property Week

1960's council tower blocks are spacious and substantial by comparison (many have two bedrooms and proper balconies). So you don't need to be Russell Grant to see how this could end up 20 years from now...

Thousands of run-down ugly flats that no one wants to live in and only the most desperate people will take... In fact, some people say that many are currently rented (from buy-to-let landlords) by relatively low-paid service sector employees. Just the industry that will be first to be hit if we have a recession, leading many of them to get up and go elsewhere perhaps?

So, in a nutshell, I see big trouble ahead and,sadly, I believe that quite a bit of Manchester's heritage has been swept away in the rush for short-term gain.

[Sparkly]

This week, I walked around Piccadilly, Ancoats and Ardwick. I've not been there for a long time, and the amount of development is huge, but with very few local facilities, as presumably residents will either go to the centre for their entertainment, and shop outside the city. I wonder now how much of 'New Islington' will go up now?

On a plus point, i've visited many European cities where most of the area just outside the centre is full of low-rise apartments, and it seems to work well, so perhaps there is still some hope of building long-term communities, especially if the council, development agencies and developers get a bit more creative about what they build and where, and there's a good mix of homeowners and renters, rather than speculators and empty properties.

[aidanorourke]

It will be a long time before Manchester is like cities where people, including families, are at the heart of the city. I'm thinking of many cities on the continent, as well as New York.

The 'apartment revolution' of the city centre is quite a phenomenon, but it's uneven. There ought to be a continuous belt of residential areas fanning out from the city centre and beyond, but there isn't.

Another thing is the public transport. if you live in Ancoats and want to visit a friend in Greengate, Salford, what public transport is there? Or the Green Quarter, bottom of Cheetham Hill Road, travelling to the apartments off Whitworth St West, near the Medlock.

No underground railway with a nice oily coconutty smell wafting up from under the ground. No nice municipal tram wending its way through the streets. The shortest way is to leg it. Or maybe ride a bike.

Part of the mix for a successful central city is there, but part of it is missing, but without all elements present, it just isn't going to work.

[SLOWLYBECOMINGNORTHERN]

I work as a Building Society as a Manager in the Manchester area. I believe that the problems with the housing market have been coming for a very long time. We now live in the perverse situation where property is unaffordable to many, due to huge investments from BTL (Buy-to-Let) investors, sucking up properties when they are "off-plan!" securing properties when they are cheapest and when FTB (First time buyers) can't. This demand has pushed the prices up coupled with homeowners greed. The local authorities have been quite happy as this has taken the strain off them for building social housing. This has been a manageable situation whilst the economy was booming and people could afford the rents. What is happening now is not only are renters facing higher costs in food fuel etc, their landlords who have to pay mortgages which are heading up (due to yet again greed - but of banks - a greed which was wiped billions of their balance sheets which the consumer is now paying for) so when people start to become unable to pay their rents and are evicted where will they go, is there enough social housing in the system to cope? No there isn't!

Interest rates will rise this year and this will only serve to hurt the poor, the rich will benefit from greater returns on their cash, whilst the poor will continue to struggle.

Pretty much pathetic outlook for the majority. And to think Capitalism was meant to save us all....