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Manchester Monitor Quarterly April 2014 Housing supply increases

Jobseeker numbers start to fall again Growth and optimism among gm firms Hotel occupancy holds steady GM housing supply increases Assault attendances continue to increase www.neweconomymanchester.com research@neweconomymanchester.com


Monitor Focus Housing supply increases This issue of the Manchester Monitor Quarterly includes a detailed feature on Greater Manchester’s housing market. Data for 2012–13 indicate an upturn in the number of housing completions in GM, with 5,350 net additional properties built during this period. While much of the focus on increasing housing supply has been on the provision of new homes, bringing back empty properties into effective use also helps meet the housing demand in GM. With analysis showing a reduction in the number of empty homes across GM of almost one fifth, the improving housing market and Government policies, including the Empty Homes Programme, are likely to have a played their part in reducing the number of empty homes in GM. The latest Land Registry data show that the average house in GM cost £104,244 in February 2014, a rise of 2.4% (£2,402) on the same month last year. Whilst below the England & Wales annual rise, house prices in GM have now increased year-on-year for the last four months. Land Registry house sales data show an increase (34%) in the number of homes sold in GM from December 2012 to December 2013. This increase is in part likely to be as a result of improved confidence in the housing market, while initiatives such as Help to Buy have had an significant impact on the new build market. The rental market continues to play an important role in meeting housing demand in GM and rental levels remain reasonably steady. In terms of the wider economy, general positive economic indicators reflect an increasingly bright outlook. Inflation fell to 1.7%, a four-year low, meaning that the Consumer Prices Index rate remains below the 2% target set by the Bank of England. Markit’s Purchasing Managers’ Indices (PMIs) for March, which measure levels of business activity in manufacturing (55.3), construction (62.5), and services (57.6) show solid signs of growth, each remaining well above the 50.0 no-change mark. Positive signs continue at the GM level. The latest data on Jobseeker’s Allowance (JSA) suggest that the trend of monthly falls in claimant numbers has returned, following last month’s slight increase as a result of temporary seasonal jobs coming to an end. February 2014 saw a 1.2% decrease compared with the figure for January 2014, and a 25.8% decrease since the same time last year, meaning that just over 64,200 people were claiming JSA in GM in February.

1 | Manchester Monitor – April 2014

The 2013 GM Business Survey finds stronger economic performance and employment growth among GM’s businesses, but also reveals hard-to-fill vacancies and skills shortages are rising. Access to finance is reportedly better but is still the main barrier reported by many and is a particular issue for growth firms, despite the support available. There was little change in internationalisation activity (imports and exports), however businesses reported rising interest in relationships with the BRIC nations (Brazil, Russia, India and China). A recent report from the LEP Network further highlights that GM compares less well to other LEP areas in terms of the proportion of firms with over 10 employees exporting, which, at 31.9% is below the UK figure of 33.0% and significantly below the leading LEP areas such as Swindon and Wiltshire (51.5%). There was a considerable increase in employers providing training (especially internally) compared with 2012, however a lower proportion of firms employ apprentices, and those that do express a preference for older apprentices, fitting with an overall trend of apprentices getting older. Hotel occupancy in Greater Manchester was up slightly in February 2014 when compared to 12 months previously, rising by 1 percentage point, to 76%. Civil Aviation Authority data on airport passenger numbers are also positive, with Manchester Airport again seeing an annual increase in the number of passengers. Ending with a look at crime, data from Greater Manchester Police for the year ending February 2014 show that the number of reported crimes is continuing to fall, declining by 1.3% over the last 12 months. The latest figures in relation to assault attendances at each of GM’s eight hospital trusts’ local emergency departments show that there has been a year-on-year rise in the number of people being treated for assaults over the last twelve months.


Monitor Dashboard Jobseeker’s Allowance (JSA) claimants

Airport Passengers

25.8%

4.6%

since last year

Business Activity

since January 2013

Hotel Occupancy

35%

1%pt

of surveyed firms reported increased turnover in the last 12 months

House Prices

average occupancy rate in GM was 76%, up from 75% on the previous 12 months

Crime Volume

Average house in GM:

£104,244

1.3%

since February 2013

Manchester Monitor – April 2014 |2


People Monitor Jobseeker numbers start to fall again The latest data on Jobseeker’s Allowance (JSA) show that 64,297 people were claiming JSA in Greater Manchester in February – a decrease of 797 (1.2%) when compared with the figure for January 2014 of 65,094. This suggests that the trend of monthly falls in JSA claimant numbers has returned, following last month’s slight increase as a result of temporary seasonal jobs associated with the holiday period coming to an end. JSA Claimants GM is now in a significantly better position than a year ago, with 22,330 people leaving the claimant count since February 2013, a decrease of just under 25.8%. Longer-term claimants are also beginning to feel the benefits of the gradual increase of business confidence, although the number of younger people on JSA remains high. Youth unemployment (JSA claimants aged 16–24) in Greater Manchester remained virtually the same at 15,660 on a monthly basis between January and February. On an annual basis however, the number of youth JSA claimants is now 33.5% (7,880) lower than this time last year. Long-term (6 months+) claimants in Greater Manchester decreased in February 2014 to 28,160, down by 1,115 (3.8%). On an annual basis the number of long-term claimants is now 23.7% (8,765) lower than this time last year. The North West (23.6%) and Great Britain (22.2%) also saw similar annual declines in long-term claimants. The North West saw a smaller monthly decline of 0.7%, while JSA claimants in Great Britain rose very slightly by 0.1%. As a proportion of the resident working-age population however, 3.7% of people in Greater Manchester were claiming JSA in February – which remains higher than the North West (3.4%) and Great Britain (3.0%).

However, JSA data should not be used on its own as an indicator of the health of the labour market. JSA is a measure of the numbers of people claiming a particular benefit, not a measure of the number of people entering work; there is evidence that at least some of the people leaving JSA are “disappearing” from the statistical radar rather than showing up in other measures of employment. Furthermore, there remain uncertainties regarding how data is being collated under the new Universal Credit system. Universal Credit is being tested in four areas in GM, and this may be affecting the numbers of claimants. In addition, it is not yet clear whether sanctioning by Job Centre Plus is driving people off benefits but not into work. Vacancies The Labour Insight data reveals that there were 13,740 job openings in GM in February 2014, down by 43.5% (10,569) on the same month last year. Whilst it is not clear why there has been such a large fall, it should be noted that vacancies data is subject to seasonal variations and should be treated with caution. The highest proportion of vacancies were in professional occupations (36.0% or 4,940), followed by associate professional & technical roles (22.8% or 3,135). Over two-thirds of the vacancies in GM (9,290 or 67.6%) in February were found in Manchester, followed by Stockport (7.1%, 974), and Bolton (5.8%, 797). The top three detailed skills clusters in GM in February 2014 were: programming, development & engineering (1,531 postings); general sales (1,094 vacancies); and web design & technologies (1,078 postings).

Jobseeker’s Allowance - Annual Change

Total Jobseeker’s Allowance Claimants in January 2014

64,297

Decreased by 25.8% year-on-year

Vacancies - Annual Change Women

Youth

Long-term

$21.8% $27.7% $33.5% $23.7%

$43.5% 1

3 | Manchester Monitor – April 2014

Men

Source: Labour/insight (Burning Glass Technologies)


Business Monitor Business growth 2012-2013 (% of businesses)

35%

Turnover growth

Job growth

32%

23%

63%

22%

Increased

Stayed the same

9%

15%

Decreased

1%

Don’t know

Growth and optimism among GM firms The 2014 Greater Manchester Business Survey consulted over 1,200 employers across the conurbation, collecting data on current and future economic performance with an aim of identifying the opportunities and barriers to growth across a range of themes. The findings include stronger economic performance and employment growth accompanied by improved sentiment overall, but with hard-to-fill vacancies and skills shortages rising. Access to finance is better, but is still the main barrier reported by many despite the support available, particularly amongst growth firms. There is little change in internationalisation, but rising interest in relationships with emerging markets. Business growth The survey found that there has been an increase in the proportion of employers in GM who reported higher levels of staff employed in the last 12 months, from 17% to 22%. In addition, a quarter of businesses anticipate an increase in the number of staff in the next year, suggesting a more optimistic outlook than at the same time last year, up from 21%. More than a third of employers in GM (35%) reported an increase in turnover in the last 12 months. This is the same as in 2012, though a smaller proportion cited a decrease in turnover than in 2012 (23%, compared with 26%). Going forward, 50% of all employers in GM anticipate increasing their turnover in the next 12 months. Financing One-in-seven employers (15%) in GM has sought finance, a slight decrease since 2012 (18%). Two-fifths of those who sought finance reported difficulties arranging it, lower than in 2012 (49%). Export, trade & connectivity One-in-five GM firms (19%) has current dealings with international markets, a similar proportion to that reported in 2012 (20%). 2013 saw a slight decrease in the proportion of firms who have plans to deal with international markets in the future (4% in 2013 compared to 6% in 2012). Three-fifths (60%) of employers with international dealings export; and

just over two-fifths (42%) have import links. Links are most prevalent with Europe-based markets (82%), while two-fifths have dealings with China and North America. The LEP Network’s 2014 review of LEP Area Economies further highlights that GM compares less well to other LEP areas in terms of the proportion of firms with over 10 employees exporting, which, at 31.9% is below the UK figure of 33.0% and significantly below the leading LEP areas such as Swindon and Wiltshire (51.5%), Buckinghamshire Thames Valley (50.3%) and the Black Country (46.6%). Employment & skills Half of all recruitment difficulties were due to skills shortages, mostly relating to technical or craft skills (67% of all shortages). Just over a fifth (22%) reported skills gaps, the most frequently cited issues relating again to technical or craft skills. Participation in training Of those not currently employing apprentices, 14% consider themselves likely to employ 16 to 18 year old apprentices in the future, with 19% stating that they are likely to employ apprentices aged 19 to 24, and 17% feeling likely they will employ apprentices aged 25 or older in the future. This fits with an overall trend of apprentices getting older, and a decline over 2011-2013 in the numbers of 16-18 year olds undertaking apprenticeships. Manchester Monitor – April 2014 |4


Place Monitor Hotel occupancy holds steady The latest data reveals that hotel occupancy in Greater Manchester in February 2014 was slightly higher when compared to the previous 12 months, rising by 1 percentage point to 78%. This average compares favourably to the GM February average between 2005 and 2013 of 74%, and comes despite Manchester city centre experiencing a slight decrease in occupancy of 0.6 percentage points year-on-year . Civil Aviation Authority (CAA) data on airport passenger numbers are also positive, with Manchester Airport again seeing an annual increase in the number of passengers, albeit lower than some competitors. Hotel Occupancy Hotel occupancy rates in Manchester city centre were recorded at 78.2% in February 2014, down slightly from 78.8% the previous year. This small decrease can be attributed to slightly lower weekday levels (74%, compared to an average weekend level of 85%). However, the 78% overall average for the city compares favourably to a 74% average for the month of February for 2005-2013. Occupancy rates for of Greater Manchester have received a slight boost in February 2014 compared to the same month a year ago, recording 76% compared to 75% for February 2013. Key dates for hotel occupancy in the city centre during February were: • 12 February – 94% occupancy achieved, with contributing factors potentially including severe gales in the North West of England causing disruption to transport services and related hotel stays. A cancelled football match between Manchester City Football Club Sunderland in the Capital One Cup at the Etihad Stadium could also have contributed to staying visits from travelling fans. • 18 February – 94% occupancy achieved, helped by the home UEFA Champions League match between Manchester City Football Club and FC Barcelona at the Etihad Stadium.

Airport Passenger Numbers Manchester Airport handled just over 1.2million passengers in January 2014, a rise of 53,351 (4.6%) from 12 months previously, as the airport continues to show solid year-onyear growth. Month-on-month passenger numbers fell by 111,930 (8.4%), as would be expected seasonally. However, the annual growth in passenger numbers at Manchester Airport for January 2014 was lower than some other major UK airports, with the London airports of Heathrow, Gatwick and Stansted, growing at 3.8%, 6.6% and 6.9%, respectively and Birmingham seeing growth of 10.5%. Recent developments, including the introduction of more new routes and discussions to secure a direct route to China reaching an advanced stage, suggest growth is set to continue through the coming year. Among new routes introduced, Flynas – Saudi Arabia’s budget airline – will commence a service three-times-per-week to Jeddah in May, which is expected to serve primarily business customers and international students. Flight numbers saw a slight decrease in January, with 126 (1.2%) fewer recorded compared to 12 months previously.

• 22 February – 92% occupancy achieved, boosted by a number of events, including Manchester City FC hosting Fulham FC in the Premiership at the Etihad Stadium, and the Manchester Bike Show at EventCity.

Hotel occupancy (city centre)

78%

Hotel occupancy (GM)

76%

(0.6% pts)

(1.0% pt)

Airport passenger numbers

(+4.6%)

1,227,261

Flights

(-1.2%)

10,380

% represents year-on-year change IMPORTANT NOTE: The source of the hotel occupancy data referenced in this newsletter is STR Global Ltd. Republication or other reuse of this data without the express written permission of STR Global is strictly prohibited.

5 | Manchester Monitor – April 2014


Housing Monitor This month’s quarterly feature looks in detail at the housing market in GM in order to provide a picture of recent trends and patterns. The analysis draws on published data from sources such as the Land Registry on sales and prices, as well as information from GM estate agents to give estimates of costs and available properties in the private rented sector. In addition, data from the Department for Communities and Local Government (CLG) allow for trend analysis of net housing completions in the conurbation over time. While the number of properties built is still far lower than its peak in 2007-08, the latest information for 2012-13 shows that completions in GM have started to rise.

Housing Completions Figure 1: Net Affordable Housing Completions in GM, 2005/6 to 2012/13 16,000 1,200

14,000

13,650 12,000

850 11,370

10,000 8,000

1,090 1,470

7,790

6,670

6,000 4,000

1,540 3,210

2,000 0

1,320 4,030

1,790 2,340

2,040 1,350

2005-06

2006-07

2007-08

2008-09

Additional Dwellings

2009-10

2010-11

2011-12

2012-13

Affordable Additional Dwellings

Source: CLG

A supply of housing to meet the demands of a growing workforce and population is a fundamental requirement if the supply side of the economy is to function effectively.

from 2008-12 and reaching a low of just under 3,400 in 2011-12 - well below the peak of 14,850 recorded in 200708 before the downturn (see Figure 1).

There will be significant household growth in GM over the next ten to twenty years, with various household projections having been undertaken to estimate the extent of this growth. GMFM assesses growth over twenty years and estimates an overall household growth of 130,000 households by 2032, which equates to an annual increase of 6,500. While the interim CLG projections estimate an increase of around 87,000 households by 2021, equating to an annual increase of 8,767 homes, the CLG figures are due to be updated in the Autumn. Currently GM is not delivering enough homes annually to meet either of the above projections, with completion rates in GM falling consistently

More positively, data for 2012-13 indicate an upturn in the number of housing completions in GM and 5,350 net additional properties were built during this period. Around one quarter of these were affordable housing, which was in stark contrast to 2011-12 when affordable housing accounted for 60% of all net completions in the conurbation. Affordable housing includes social rented, affordable rented, intermediate housing and supported housing, provided to specified eligible households whose needs are not met by the traditional housing market.

Manchester Monitor – April 2014 |6


Empty Homes Across GM the decrease in overall number of empty properties has been just over 19%. England as a whole also saw a decline in the number of empty homes between 2011 and 2013.

Much of the focus on increasing housing supply has been on the provision of new homes, however this also includes bringing existing but empty properties back into effective use. Although empty properties are a characteristic of many areas, the North West is one of the worst affected with 3.7% of its stock being empty in 2012-13 (see Figure 2). GM had 3.2% of its stock empty over the same timeframe, with and Oldham (4.1%) and Bolton (4.0%) having the highest levels on a district basis.

Reduction in empty homes is in part due to overall confidence in the housing market, and Government initiatives to bring empty homes back into use. These initiatives include council tax changes and the Empty Homes Programme that provides grants and incentives for councils, housing associations, community groups and owners to bring empty homes into affordable use.

All areas in GM apart from Stockport have seen a decrease in the number of empty properties since 2011/12 and the decrease in Manchester has been particularly high at 56.6%.

Figure 2: Empty homes in GM, 2012-13 Area

Total Dwellings

Number Empty Homes

% Empty Homes

% Change in empty homes. 2011-13

Bolton

120,338

4,820

4.0%

-1.6%

Bury

80,923

2,854

3.5%

-2.3%

Manchester

209,138

5,399

2.6%

-56.6%

Oldham

92,439

3,836

4.1%

-6.4%

Rochdale

90,082

3,114

3.5%

-14.9%

Salford

107,391

3,324

3.1%

-7.5%

Stockport

124,677

3,571

2.9%

3.9%

Tameside

98,683

2,935

2.9%

-13.2%

Trafford

95,762

2,452

2.6%

-6.8%

Wigan

139,221

4,970

3.6%

-4.2%

GM

1,158,654

37,275

3.2%

-19.4%

North West

3,106,999

114,882

3.7%

-11.7%

England

22,793,248

635,127

2.8%

-10.6%

Source: http://www.emptyhomes.com/statistics-2/empty-homes-statistice-201112/

House Prices & Sales The latest data from the Land Registry show that the average house in GM cost £104,244 in February 2014, a rise of 2.4% (£2,402) on the same month last year. This was below the England & Wales annual rise of 5.3% (£8,576), with house prices reaching £170,000.

recorded increases. The biggest annual house price rises were in Oldham (8.8%, or £6,664), Bury (6.8%, or £7,021) and Stockport (3.7%, or £5,234).

In addition, house prices in GM have now increased yearon-year for the last four months (see Figure 3). This followed 35 consecutive months of annual declines previously.

With the exception of the North East, every region saw house prices rises from February 2013-14. London is continuing to see the largest net increase, with annual growth of 13.8% (£50,129). A typical property in London cost £414,000 in February 2014.

At a local authority level, Rochdale and Trafford saw house price declines between February 2013 and February 2014 – of 5.6% (£5,196) and 0.6% (£1,134). In Salford they remained broadly statics, while the other seven districts

Land Registry house sales data show that there were 2,800 properties sold in GM in December 2013, an increase of 34.0% (711) on the same month in 2012. Every GM district had rising sales.

7 | Manchester Monitor – April 2014


Figure 3: Year-on-year house price change 15%

10%

5%

0%

-5%

Greater Manchester

London

14 Fe b

ct 13 O

13 Ju n

13 Fe b

12 O ct

12 Ju n

12 Fe b

O ct 11

11 Ju n

11 Fe b

ct 10 O

10 Ju n

Fe b

10

-10%

England & Wales

Source: Land Registry

Availability of Finance There was an increase in first time buyers in 2013, where previously the market may have been less accessible. Firsttime buyers were an especially important factor in the improving market, as well as improved economic conditions. The introduction of government schemes like Help to Buy, which was introduced in 2013 and enables the purchasing of an equity share of 75% in a new build property up to the value of £600,000 played an important role. The second stage of the scheme was introduced in January 2014 and provides buyers an opportunity to access a 75% loan-tovalue mortgage with a 5% deposit.

Figure 4 presents CLG statistics on the number of home purchases and the value of equity loans under the Help to Buy equity loan scheme from April 2013-January 2014. Over this period the number of Help to Buy loans approved in GM was 565, with a total equity loan value of almost £18 million. The average value per transaction of these loans in GM is £31,804 compared to £40,224 nationally.

Figure 4: Number and value of Help to Buy: Equity Loans, April 2013-January 2014 Area Bolton

Number of Equity Loans, Apr 2013-Jan 2014

Value of Equity Loans, Apr 2013-Jan 2014

Value per transaction

41

£1,261,100

£30,759

Bury

34

£950,924

£27,968

Manchester

169

£4,700,423

£27,813

Oldham

36

£1,042,832

£28,968

Rochdale

71

£2,212,543

£31,163

Salford

68

£2,248,497

£33,066

Stockport

11

£571,830

£51,985

Tameside

39

£1,239,245

£31,776

Trafford

18

£824,684

£45,816

Wigan

78

£2,917,240

£37,401

565

£17,969,318

£31,804

12,873

£517,801,482

£40,224

GM England Source: CLG

Manchester Monitor – April 2014 | 8


Rental Market Rental levels are a key indicator of the level of activity and the quality of the private rented stock. Any change in these levels gives an indication of any pressure being placed on the private rented sector particularly in relation to the lack of available home ownership options.

house rental values across GM at ward level. The distribution of house rental values is similar to that of house prices in that the highest values occur to the south of the conurbation and in peripheral areas and the lowest levels in the central areas of the districts in the north.

A typical 2 bed property in GM could be rented for about £500 per calendar month in January 2014, rising to just over £660 per calendar month for 3 bed properties. A 4 bed property cost around £1,000 per calendar month.

In terms of the apartment rental market, a studio apartment can be rented in GM for about £449 per calendar month, just over £500 for a 1 bed property, over £650 for a two bed property.

At a more local level there are clear distinctions of rental levels within the districts. Figure 5 shows the distribution of

Rental levels for houses and apartments have remained fairly constant both over the year and last quarter.

Figure 5: Housing Rental Market in GM, January 2014

Source: GM estate agents

Summary Reversing the trend seen in recent years, the number of net housing completions in GM has started to rise again, although not yet reaching the level required to meet future demand. Another positive sign is that the number of empty properties in the conurbation has fallen in the last two years as schemes such as the Empty Homes Programme start to have an impact.

9 | Manchester Monitor – April 2014

House prices in GM have now been rising on an annual basis for the last four months and sales are also increasing – which in part is likely to be as a result of initiatives such as Help to Buy and improved confidence in the market, enabling first time buyers to get a foot on the housing ladder. The rental market remains important in meeting demand in GM, and while average rents vary across the conurbation rental levels have remained reasonably steady on a quarterly and annual basis.


Crime Monitor Assault Attendances across GM 13,400

13,200

13,000

12,800

12,600

12,400

12,200

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

Rolling 12 month total

Assault attendances continue to increase The latest figures in relation to assault attendances at each of GM’s eight hospital trusts’ local emergency departments show that there has been a year-on-year rise in the number of people being treated for assaults over the last twelve months. Data from Greater Manchester Police (GMP) for the year ending February 2014 show that the number of reported crimes is continuing to fall, declining by 1.3% over the last 12 months. Assaults Data Baseline data for the 12 months ending January 2014 show that 13,007 people were treated for assault related injuries over the last 12 months in GM hospitals, an increase of 3% on the figures from the previous year. This total, whilst a decrease on the previous three months, still represents the fourth highest annualised figure since January 2012, and follows a trend wherein figures have been increasing since November 2012, particularly in Oldham and Rochdale. Contrary to this trend however, figures are reducing for residents living in Bolton and Trafford. Analysing the data in further detail, in the 12 months to January 2014, 51% (6,589) of assault patients were aged 15–29. The same demographic comprises just 21.5% of the GM resident population as a whole according to the latest ONS estimates, highlighting that 15–29 year olds remain particularly vulnerable to violence. However, the proportion of 15–29-year old victims is currently at its lowest level since our records began in 2009. In the period since then, the proportion of assault victims aged under 15 has risen from 4.8% to the current figure of 5.2%, 30–59-year olds has risen from a 2009 low of 37% to the current high of 41.2%, and those aged 60+ has also increased to a current high of 2.9%.

Crime Volumes Figures for the year ending February 2014 show that there were 180,730 reported crimes in GM – an annual decline of 1.3% or 2,344 fewer offences. Victim-based crimes (stealing, criminal damage & arson, violence, and sexual offences) saw 162,867 cases recorded over the same period, representing an annual fall of 0.1%. While overall volumes of crime decreased, the number of sexual offences increased by 15.6% (427) across GM during the year to February 2014, possibly due to increased levels of reporting. The number of stealing offences also rose by 2.8% (2,687) over the same period. GM Fire & Rescue Service Data Deliberate fires in GM were recorded at 8,866 for the 12 months to February 2014, compared to 7,975 for the previous year, an annual rise of 11.2% (891). However, primary fires, which are those where owned property is involved, fell year-on-year by 4.0%, to 4,946 for the year ending February 2014.

Manchester Monitor – April 2014 |10


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Manchester Monitor Quarterly April 2014