Development Of Change: An analysis of the changing Real Estate prices in Manchester since the Recession in 2008.
Introduction
This Research Proposal aims to provide a contextual analysis on the Recession in 2008 and the affect it has had on Manchester in terms of the changing real estate prices for my future dissertation. This proposal will look at the topic chosen and provide an insight as to the difficulties Manchester has faced and how the aspiring city has grown into becoming one of the most sought and successful cities in the UK. A recession is described as a negative-economic growth that has occurred for two successive quarters which was exactly what happened to the UK and Manchester. (Thomas, Hills and Dimsdale, 2010). As the UK’s economy crashed into an economic recession in the latter months of 2008, one of the main cities that was affected immensely by the recession was Manchester. The recession had several repercussions in different markets but the main research topic that will be discussed is the impact it had on the Real Estate Sector including both commercial and non-commercial developments and will look at the economic trends and markets that have helped contribute to the success of Manchester.
Statement of Problem
Manchester is one of ten metropolitan boroughs within Greater Manchester which have a £62.8 billion gross value added (GVA) which makes it the biggest city-region economy after London (Ward et al., 2015; Oguz and Knight, 2010). Equally, Manchester’s real estate has been one aspect that has played a key role in shaping its economy and that of the UK in general. Multiple studies have been carried out to examine the economic development of Manchester since the 2008 economic recession with notable statistics recording massive growth in gross value added (GVA) over the years. However, no studies have examined the input of Manchester’s real estate into the UK’s economy particularly in regard to how the 2008 economic recession influenced the subsequent changes in real estate prices to date (Oguz and Knight, 2010). After searching and identifying case studies and articles, there is a need for research to study and analyse the changing real estate markets and price changes in Manchester pre-recession and how this was influenced by the 2008 recession which will be the base of the contextual analysis in my dissertation to provide a detailed explanation of the specific topic and through a range of methodology that will be used to carry out independent research and to support ideas and points made. As there is no exact piece of work studying or relating to the sole purpose of Manchester, the future dissertation will focus on this topic and provide the relevant information needed.
Aims and Objectives of Research
The main purpose of the research for the dissertation and this research proposal is to examine how the 2008 economic recession in the UK influenced the changes in Manchester’s real estate prices in the years that followed and look at how Manchester has overcome the difficulties faced from the recession. The data and research I provide will come from primary data such as interviews and questionnaires with direct sources and companies who have been established long enough to have pulled through the recession and are still an active company till present and secondary data which identifies trends of the economy through public reports or past research studies.
Research Objectives
• To examine the Real Estate market
• To study the changes in Real Estate prices in Manchester from the years 2008 to 2019
• To establish how the 2008 economic recession influenced the changes in Real Estate prices in Manchester from 2008 to 2019
• Looking at the Growth of Commercial and Non-Commercial developments with Manchester’s success in the Real Estate Sector
• To research and identify how to overcome the recession or lessen the impacts on the real estate sector if the city faced a similar situation.
Literature Review
Real Estate Market
The dissertation and research proposal apply to the trading of selling and buying of buildings and land along with its other resources such as buildings/houses, immobile properties including both commercial and non-commercial developments etc. (Mooya, 2016). According to Mooya (2016), the real estate market prices are controlled by the laws of demand and supply, whereby prices fall when the supply is greater than demand and vice versa. There are several types of real estate, which include single-family homes, high-value homes, duplexes, townhouses, multigenerational homes and commercial developments which include retail shops, offices, warehouses, etc. (Mooya, 2016; Hartmann, 2015; Brueggeman and Fisher, 2011).
As the UK experienced an economic recession which was described as one of the worst economic falls in the UK’s history, several key cities were impacted heavily compared to smaller towns and cities hence focusing my proposal on Manchester due to several reasons, one particularly because the economy of Manchester is amongst the largest in the UK with the city having an estimated population of 2.55 million and one of the biggest real estate markets across the UK. (Haughton et al., 2016; Hincks,2015). Real estate in Manchester, just as in the rest of the UK, is regulated according to English and Scottish land law. Some of the factors that have benefited Manchester’s real estate market since the 2008 economic recession include foreign investment and affordable housing, introduction of policies and government interjections including global imbalances which will be discussed in further detail with the dissertation and provide an insight into key steps that were taken to overcome the recession.
Changes in Real Estate Market Prices in Manchester from 2008 to 2019
No study has examined and provided statistics on the real estate market prices change in Manchester specifically or there is no exact data set that analyses the change in Real Estate prices and market of Manchester. However, statistics published in Plumplot.co.uk show that the average property price in Manchester as of September 2019 is £192k, this price marked a 1% increase over the period between October 2018 and September 2019. This price is lower than that of England and Wales combined, which stands at an average of £291k (Plumplot.co.uk, 2019). Statistics used to draw these conclusions were price paid data extracted from authenticated data sources particularly UK’s HM land registry data, ordinance survey data, and national statistics data under crown copyright and database right 2019 and which was licensed under the open government license v3.0.
Figure 1: Price Rank of Manchester Houses (Plumplot.co.uk, 2019)
This graph shows a comparison of house prices in Manchester against the nearby areas from the year 1995 to 2019 shows that its average price rose above that of, Oldham, Bolton, and Wigan from the years 2000 to 2019, however it was lower than that of Stockport, and Warrington from the year 1995 to 2019 (Plumplot.co.uk, 2019). These figures and comparisons have been based on pre-recession from the years 2000 till post-recession 2019. For this proposal this is only part of my research as in the dissertation, Manchester will also be compared to comparable cities such as Liverpool, Leeds, Cardiff and other cities which have similar economies, population and real estate markets which can be compared and subsequently the same implications and repercussions that were taken and can be applied to Manchester.
Figure 2: House Prices of Manchester and Nearby Areas (Plumplot.co.uk, 2019)
How The 2008 Economic Recession Influenced Changes in Real Estate Market Prices in Manchester Since 2008 To 2019
Data by the UK Office for National Statistics (2019) on Greater Manchester South Real estate showed a rise in cumulative Regional Gross Value Added (RAGV) shortly after the 2008 economic recession up to the year 2012. So, after studying the statistics and the different articles available from the Office of National Statistics it shows the years post-recession from 2010 onwards grew substantially compared to the downfall of the pre-recession years. This literature review is not a complete analysis of the future dissertation but based on a light analysis of what is going to be included and will also include broader information that is available and will also be used in the literature review.
Figure 3: Regional Gross Value Added (RAGV) (UK Office for National Statistics, 2019)
However, time-series statistics by the UK Office for National Statistics (2019) reveal a sharp decrease in real estate activities in Manchester during the 2008 to 2009 which is the main period of economic recession. The trend was replicated in the year that followed but further decreased in the year 2012 after a small rise between the years 2011 and 2012. There was also a slight decrease from the year 2016 to 2019 but mainly this is due to the uncertainty and future of the UK regarding Brexit and the fall in the general economy. Now this a factor that will also impact heavily on the future Real Estate markets and prices which will be discussed as this links in with future contingency plans the real estate market has to make and could possibly face another similar situation.
Figure 4: Manchester Real Estate Activities Before and After Recession (UK Office for National Statistics, 2019)
Due to the limitation of this research proposal the dissertation and literature review will study and analyse the graphs and journals in a detailed explanation with justification so this literature review is almost like a speculation of the 2008 recession and the impact it’s had on Manchester’s real estate markets and prices which the graphs demonstrate and show real estate activities declining in the period of the recession which is the years 2008 and 2009. This will be validated in the dissertation after thorough studying and doing the actual research through analysing the data and interpreting it to Manchester. Also, in terms of the information studied above is just a principle and understanding of the situation, the dissertation will be discussed with more information focusing on the post-recession years and policies to discuss the argument and how the literature will differentiate between policy and academia.
Methodology
Research Approach
This research proposal and my future dissertation will use a mixed-method research approach, which is characterised by the combination and comparison of sources of data sources, data collection and analysis procedures, inferences that occur at the end of the research, or research methods (Creswell and Creswell, 2017). The dissertation will use both numerical data and abstract concepts, and therefore it can only be explored through an integration of both qualitative, and quantitative research approaches. The project intends to seek the real estate experts’ opinions and views on the effects of the 2008 economic recession on changes in real estate prices in Manchester through interviews with companies such as the CBRE real estate firm, and employees/executives to answer questions relating to the impact of the recession that it had on the company. The questions asked during the interviews will be based on their thought and experience of the recession, how the company has recovered and built itself back up, thoughts on the current financial markets and prices post-recession and how they would overcome this situation in the future. By doing this it will enable me to obtain qualitative data to further support arguments and points made.
The dissertation will also involve quantitative data collected through a survey style format where questionnaires will be distributed to Manchester’s real estate companies’ executives as well as experts in the field with different companies to allow more expertise and information from different sources. Further, the research will request secondary quantitative data from government institutions such departments concerned with the bureau of statistics as well as real estate companies on price changes in real estate within Manchester since the 2008 economic recession.
Research Design
A concurrent parallel mixed-method research design will be used in the dissertation. It concerns the collection and analysis of data from both approaches discussed above to respond to a single type of research question (Remler and Van Ryzin, 2014). Both quantitative and qualitative data are of equal importance to this study, and on this basis, this research design is very crucial as it will enable me to collect data from both research methods independently and make justified conclusions from multiple sources.
Population Sampling Strategy and Internal and External Validity Of Information and Sources
This method of population sampling will involve real estate experts and executives of real estate companies within Manchester as well as real estate companies. The sample of these experts and executives will be chosen through random sampling. This will eliminate sampling bias given that each member in the population has equal selection probability or chance (Martínez-Mesa et al., 2016). Randomisation will be used to consolidate and control data for internal validity and generalised research will focus on the external aspect (Sedgwick,2010).
Limitations
For the future dissertation I do expect challenges in different issues, but one example is obtaining secondary quantitative data on Manchester’s real estate prices between years 2008 and 2019 from government institutions and real estate companies within Manchester since these institutions and firms may have strict data protection policies and regulations hence may not be willing to reveal the data for research purposes. However, with secondary data it is possible to retrieve and use information from broader sources and apply it to Manchester accordingly which will make secondary data more achievable.
Feedback
A variable proposal that highlights some key issues but does not effectively provide a critical reflection on them. The literature review and methodology could be extended and developed further to provide more thematic and methodological/sampling/analysis focus.
The opening sections of the proposal are somewhat vague and require further refinement. Whilst it is acknowledged that the 2008 recession influenced land values/prices in Manchester greater detail and focus could have been added from the background literature and local grey material.
The aims/objectives could be refined to be more focussed.
The literature review highlights some key issues relating to location, scale and actual change in practices in the UK/Manchester but does not provide sufficient critical reflection on these materials. The final literature review will need to be more refined to illustrate the key market, policy and practice drivers of changing prices and contextualise (and analyse) these more effectively.
The methodology makes an attempt to link what will be done with the methods literature. It also highlights some of the limitations of the chosen techniques which should be developed further in the dissertation. Greater reflection on the type of data developed and how it will be analysed would have been useful.