By 2019, it forecasts that house price growth in the region could start to outperform the rate of growth in London.
The firm believes there could be a housing shortfall of 30,000 units by 2021, driven by an increase in population related to jobs growth and high student retention. While official data estimates the region needs 90,000 new homes by 2021, Savills has identified just 60,000 in the immediate development pipeline (comprising 16,500 under construction, 19,100 permitted and 24,400 under application).
Already, reduced new supply means average house values are close to or level with their 2008 peak across Leeds City Region, with some hotspots outperforming this. York is currently 14% above its 2008 peak with average values of £231,700, while Leeds is 3% above its peak with average values of £165,600.
Matthew Jones, development director at Savills, said: “House building was damaged by the 2008 recession and although delivery has steadily recovered since 2012, there is now an urgent need for residential development sites to be brought forward.
“The issue is exacerbated by greenbelt constraints and the cost of developing out major regeneration schemes.”
The 10 local authority areas in Leeds City Region are Barnsley, Bradford, Calderdale, Craven, Harrogate, Kirklees, Leeds, Selby, Wakefield and York.