Whilst 2020 will see gradual change as housebuilders start to rebuild development pipelines, this foundational growth will set the market up for significant regional growth from the end of the year through to 2024, with Greater London (17%), the East of England (16.4%) and the North West (16.5%) predicted to record the strongest sales price rises.
Manchester is forecasted to have both the highest sales price (17.1%) and rental growth (16.5%) of any UK city over the next five years. The sales price is notably higher than the UK average (14.8%), despite London having a significantly higher volume of development. There are a variety of reasons for this, namely growth in the local economy and population.
Bristol is ranked second to Manchester in terms of speed of growth, with a sales price growth forecast of 17% between now and 2024. The city’s first co-living scheme has secured planning permission and the multifamily sector continues to grow with several developments under construction.
Whilst Leeds and Liverpool are not growing quite as fast, they are continuing to evolve as strong hubs for property. As the city centre continues to increase its number of owner-occupiers, investors, renters and developers, Liverpool is developing into a modern city with a forecast of 13.1% sales price forecast for 2025. Similarly, Leeds is seeing change, with multifamily schemes in the development pipeline catalysing a potential rent push in the city’s market.
The West Midlands property market is also modernising. Birmingham’s urban living sector has become prominent in the city centre over the past few years and is expected to grow further with continued demand. This has been aided by enhanced public transport at Grand Central, with further improvements expected when HS2 is launched. With this, Birmingham can be expected to grow stronger in both economic and demographic terms, mainly as transport in London is seen as one of its biggest pull factors.
As the UK progresses through the first few months of the post-Brexit era, markets are still adapting, and the property sector is no anomaly. Across all UK city centres, higher price growth is likely to occur as greater economic and political certainty encourages positive consumer confidence, strong real wage growth and a robust jobs market.
Nick Whitten, Director of UK Living Research & Strategy, JLL said: “2020 is a milestone year for the UK’s regional cities and getting the property sector ‘back on track’. Whilst as a country we are still reconciling post-Brexit dynamics and there is a level of uncertainty that is affecting all markets, including housing, as everything begins to stabilise, housebuilders will be able to move forward and we can expect significant growth in the property sector across the UK.
“JLL forecasts regional cities will be able to retain their talent and bridge the gap they currently have with London if adaptations to their property hubs are made. These cities are currently on track for success, with many developing more modern living approaches. If this can be coupled with a balanced life-work package, a shift in the industry from a London-centric property hub can, and should, be expected.”
