Land acquisition for residential development across the North West has increased by 8% in the first half of 2015 compared to the second half of 2014 according to JLL.
Research from the property consultant’s residential team shows that the region’s housebuilders have committed to land acquisitions with potential to contribute in excess of 7,500 new family dwellings across 550 acres of land.
JLL says the growth in transactions is driven by positive forecasts for the housing market over the next five years due to rising demand and a continued under supply.
According to the consultant, changes to the stamp duty system as well as the stability of financial markets and the broader economy following the election will have benefited purchasers in the region as well as the Government’s push for streamlined planning for residential developments.
However, at the start of the year, JLL research predicted the North West would need 18,000 new homes annually for the next five years to satisfy demand, with 9,000 in Manchester city centre. In addition continued upward pressure on build cost has affected developers’ margins with some reporting a cost increase of up to 10 per cent year-on-year and availability of labour has been outlined as a continuing issue in the research.
Kieran McLaughlin, residential director at JLL in Manchester, said: “The expansion of new housing is a cornerstone of the country’s prosperity. Providing more family homes across the North West is one of the main factors now determining the rate of economic expansion – particularly in suburban areas and market towns outside of Liverpool and Manchester, where development of housing has a proportionally larger impact on local job growth and economic output.
“The region has been undersupplied for a significant amount of time and we’ve been awaiting a major increase in development activity to match the on-the-ground demand for new family homes. This is why the Government’s move to modify the planning system, to unlock brownfield land and speed up the process for housing development, will come as good news for the industry.
“Although this is an increase on the rate of acquisition we saw at the end of last year, our research predicts that the delivery of new homes will still lag significantly behind demand until the planning system and the supply of labour improves.”