The property market across regional England is starting to become a major power in terms of construction, according to a new report, which has stated that both commercial and residential starts are now booming in a number of key regional cities.
According to data from Deloitte, building conditions in both markets are now so favourable, spurred on by the growth of things like purpose built off plan property for sale, that construction levels are now headed back towards where they were before the financial crisis for the first time since 2008.
Deloitte said that business improvements in both Birmingham and Leeds, where tech and digital marketing companies in particular have started to flock in the last two to three years, have meant that there are more commercial properties now being built there than at any time in the last decade.
Off plan property in Manchester continues to grow
Meanwhile, there has been a real growth in the volume of residential off plan property in Manchester, with construction in this sector being boosted by rental demand from both students and young professionals coming to the city.
There are now more Manchester new build apartments being started than at any time since 2008.
Speaking of the change in building conditions across the last few months, Chris Oglesby, chief executive of Bruntwood, told the Financial Times that it all boils down to the way companies are now operating, with a greater number opting to ‘northshore’ and look towards away from London, where they can operate cheaper without losing out on any business conditions.
“The pipeline is good and more diverse than ever. As well as the professional services companies, we have new businesses and big corporates,” he told the FT.
Edwin Bray, a Deloitte partner in Birmingham, said that the reasons for more building taking place in the north and outside of London include the improvements that have taken place across the regions in terms of infrastructure in the last few years.
“Improvements in transport links and major infrastructure works have opened up new development opportunities in areas that would have been considered peripheral just a few years ago,” he said.
Government’s £130 million investment in Manchester
Prime Minister Theresa May has promised £130 million for Greater Manchester in the government’s Northern Powerhouse scheme.
Manchester will receive the largest amount of investment which has been earmarked for a ‘modern industrial strategy’ to support new businesses and science.
Off plan property developers have taken advantage of the rise in demand for new build apartments in Manchester city centre, as more people relocate to the city.
Record 8.9% price growth in 2016
Data from Hometrack revealed that the average price of properties for sale in Manchester increased by 8.9% in 2016. The average UK growth was 6.6% in 2016.
Hometrack cited a supply versus demand imbalance behind Manchester’s rising house prices and have forecast that city may become the UK’s no.1 location for house price growth in Q1 2017.
Property advisors JLL expect that house prices in the North West will rise by 18.1% over the next 5 years, with prices of properties for sale in Manchester and other northern hotspots like Leeds and Liverpool set to outpace the rest of the country.
Buying off plan property in Manchester before prices increase further may provide investors with strong capital growth in the mid-to long-term.