You are here: Home - News -

Regional ‘hotspots’ offer growth hopes

by: Heather Greig-Smith
  • 31/01/2017
  • 0
Regional ‘hotspots’ offer growth hopes
The 'hotspots' of Manchester, Edinburgh and Birmingham will outshine the rest of the UK in 2017, according to property consultancy JLL.

JLL said very little house price growth can be expected this year as prime London remains flat and the country absorbs the impact of Brexit uncertainty.

Price growth will be subdued, with 0.5% increase forecast for the UK, rising to 1% in London.

However, the big regional cities may outperform. Weak levels of supply in Manchester city centre pushed prices and rents up by around 15% and 11% respectively in 2016. This is expected to continue in 2017.

Meanwhile, in Edinburgh suburban family homes are in demand alongside build to rent developments in the city centre and towards Leith.

Birmingham, which is the beneficiary of the first big Housing Growth Fund investment into 2,000 new homes, is also attracting renewed attention, having been overlooked by large-scale residential investors since the downturn.

JLL’s lead director for residential, Andrew Frost, said the number of new build starts in London will fall dramatically.

“Legislative changes, such as stamp duty and the uncertainty around Brexit, have led to weaker investment demand from overseas as well as domestic buyers. Alongside an overstretched owner-occupier market, this will keep a lid on price pressure,” he said.

“At the same time, build costs will see significant inflation as the devalued pound sterling hits imports while the Mayor has continued to push for bigger affordable housing contributions. As a result, in contrast with the nearly 24,000 homes built in London during 2015, 2017 levels are expected to fall back closer to 16,000.”

Frost said a strong, stable political backdrop for housing policy aligned with the creation of the new London Plan and the Government White Paper will be important for the industry.

JLL also predicted that residential development in Scotland is set for five years of growth, with demand for homes continuing to outpace supply.

However, continued political and economic uncertainty surrounding Brexit and a possible second referendum will ensure a cautious approach from housebuilders, placing continued pressure on price and rental growth, especially in key city centres.

It added that the Scottish Land and Buildings Transaction Tax is a ‘housing market thorn’, impacting transaction volumes higher up the value curve.

Neil Chegwidden, JLL residential research, said: “Housebuilders are more pro-development now than they have been for some time. Encouragingly we are now seeing the re-emergence of smaller and mid-sized housebuilders, providing stiff competition to the larger and more established Scottish housebuilders who have kept their toes in the market despite tougher market conditions in recent years.

“This is forcing up land values in key locations and creating a more diverse base of developers but the battle and scarcity for prime city centre sites is also generating opportunities and desire to develop in peripheral locations.”

“All of this is positive for the Scottish residential market moving forward. Let us hope that the political and economic landscape does not undermine the drive towards a more normal and sustainable housing market.”

There are 0 Comment(s)

You may also be interested in


Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.


Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions

Read previous post:
Landlord's keys
Accidental landlords boost insurance sector

The rise in ‘accidental landlords’ is increasing demand for landlord insurance, according to Paymentshield.