Manchester becoming unaffordable for young people, report warns

House prices in Manchester have quadrupled in recent years, making the city increasingly unaffordable for young people, a new report has warned.

The report by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) and housing provider, One Manchester, warns 13,000 people are currently on a waiting list for social housing in the city.

A survey carried out for the report also found that almost half (48%) of young renters across Greater Manchester as a whole had to cut back on essentials to cover their housing costs, compared to 33 per cent across England.

Meanwhile a quarter of young people in Greater Manchester live with parents for longer than they would like, compared to 20% in the rest of England.

The report also warns about the rise of the ‘gig economy’ and the impact this is having on the housing market.

Around 6% of those surveyed worked in zero-hours employment or work for app-based companies like Deliveroo.

These individuals face barriers to both traditional mortgages as well as renting due to credit checks.

In order to remedy the situation, the report recommends housing associations consider a model of ‘escalator ownership’ – where young people rent at a reduced rate in order to save, eventually buying a proportion of the home they live in from a housing association – as a more flexible rent to buy option.

It also calls on mortgage providers and private landlords to work with housing associations and their partners to explore new ‘minimum standards’ when running checks on prospective buyers and residents.

These need to account for the growing number of young people working in flexible employment and ensure poor credit history does not exclude tenants from finding a home.

‘Young people are being failed by our current housing system – and this is particularly true in Manchester,’ said report author and RSA senior researcher, Hannah Webster.

‘On the one hand, the cost of deposits and the increasing difficulties faced obtaining mortgages – especially given the growth in ‘gig economy’ with its volatile incomes – are preventing young people from owning their own homes. On the other, private renting is insecure with young people having little chance of stability or putting down roots, and social rent is all but unachievable. Other options are needed for today’s young people.’

‘A new Greater Manchester housing devolution deal should give mayors and councils Scottish-style powers to cap runaway rents in areas like central Manchester,’ added Ms Webster.

‘These “rent pressure zones” would help those facing steep rents in certain neighbourhoods, without taking the step of introducing rent controls across the board. In Greater Manchester we suggest that individual councils have the opportunity to propose and review potential zones.’