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Dr. James Harrington Warns Manchester Housing Market Overheating

  //house-home.news-articles.net/content/2025/11/2 .. warns-manchester-housing-market-overheating.html
  Published in House and Home on Thursday, November 20th 2025 at 9:15 GMT by Manchester Evening News

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Property Expert Issues Difficult Warning About Manchester’s Housing Market

In a stark reminder that the property boom may soon hit a roadblock, local housing analyst Dr. James Harrington—known for his independent reports on the Manchester real‑estate landscape—has issued a hard‑nosed warning that the city’s property market is showing signs of overheating. Published on the Manchester Evening News (MEN) and followed by a series of links to related reports, Harrington’s briefing is an early alert to buyers, investors, and policymakers that the market’s rapid rise may not be sustainable in the face of looming economic headwinds.

Who is Dr. James Harrington?

Dr. Harrington is the founder of Harrington & Co., a boutique consultancy that specialises in property market research and valuation services. With a PhD in Urban Economics from the University of Manchester and a decade of experience advising both the public and private sectors, Harrington is frequently cited in national publications such as The Guardian, Property Week, and The Financial Times. His latest analysis, sourced from the UK Land Registry and the Office for National Statistics, underpins the warning issued to the MEN readership.

The Core of the Warning

At the heart of Harrington’s analysis is a combination of three key trends:

1. Escalating Prices Relative to Income
   The average house price in Greater Manchester has surged by over 35% in the last two years, outpacing wages which have risen by only 10% during the same period. This widening gap, Harrington argues, signals that prices have moved beyond levels that the local population can comfortably afford without overleveraging.

2. Rising Mortgage Rates
   The Bank of England’s recent rate hike to 4.25% has already begun to squeeze borrowing costs. Harrington notes that this hike is likely to be followed by further increases as the bank continues its fight against inflation, which would push monthly mortgage payments beyond the threshold that many buyers deem sustainable.

3. Supply Constraints
   Local council data reveal that the pace of new housing construction in the region has stagnated, with fewer than 3,000 units added in the past year. Harrington points out that the supply shortfall has been a key driver of price growth, and that unless there is a significant uptick in building activity, the market may be primed for a correction.

Expert Commentary and Data

Harrington cites specific figures that paint a sobering picture. According to the Land Registry, the median house price in Manchester rose from £180,000 in January 2022 to £236,000 in March 2024—an 31% increase. Simultaneously, the average monthly mortgage payment for a £250,000 loan—factoring in a 4.25% interest rate—has climbed from £1,070 to £1,260, a 17% jump.

The Bank of England’s latest forecast, referenced in the article, predicts that the cost of borrowing could reach 4.75% by the end of 2025. Harrington warns that such a rise could push monthly mortgage payments beyond the 30% of income threshold that most lenders consider safe, potentially leading to a spike in defaults.

Contextualising the Warning

The article also situates Harrington’s warning within a broader national conversation about housing affordability. Links lead to reports from Property Week that discuss the government's ambitious “Build to Rent” programme, and to a recent Manchester Guardian piece that analyses the impact of the “Housing Act 2023” on local developers. By weaving these sources together, the MEN article offers readers a panoramic view of the forces at play.

Notably, Harrington references the “Affordable Housing Taskforce” report (available on the Manchester City Council website), which outlines the city’s strategy to deliver 5,000 new affordable homes by 2030. He argues that while the taskforce’s plans are a step in the right direction, the timeline is too distant to mitigate the immediate risks he identifies.

Practical Implications for Buyers and Investors

In practical terms, Harrington advises prospective buyers to adopt a more cautious approach. He recommends:

• Delaying Purchases until mortgage rates stabilize, especially for first-time buyers whose financial buffers may be thin.
• Opting for Rent-to-Own Schemes as a way to test the market without overcommitting.
• Diversifying Investment Portfolios by incorporating lower-risk assets, rather than allocating a disproportionate share of capital to property.

For investors, Harrington warns that the high valuation multiples currently dominating the Manchester market—often exceeding 6.5 times the price-to-earnings ratio for the local property sector—could prove unsustainable, especially if interest rates climb further.

The Call for Action

The article concludes with a call to local policymakers. Harrington stresses that if the city wants to avoid a potential downturn, it must accelerate the supply of new homes and consider policies that reduce speculative investment. He cites examples from other UK cities—such as Leeds and Sheffield—where targeted incentives for developers have successfully increased output.

Key Takeaways

1. Price-to-Income Imbalance: Manchester’s property prices are outpacing wage growth, raising affordability concerns.
2. Mortgage Rate Increases: Upcoming Bank of England hikes will tighten borrowing conditions.
3. Supply Shortfall: Limited new construction could sustain price growth, but also raises the risk of a market correction.
4. Action Required: Buyers, investors, and local authorities must respond proactively to mitigate risks.

By weaving together data, expert insight, and relevant policy discussions, the Manchester Evening News article offers a comprehensive, data‑driven snapshot of a market at a tipping point. The warning from Dr. James Harrington is a timely reminder that while property markets can deliver impressive returns, they also carry risks that require careful monitoring and proactive management.