The North West’s leading cities are experiencing a radical renaissance, with a booming residential market acting as a catalyst for widespread regeneration, writes Angela Hesketh of Jackson Lees Group.
This will be a key trend for 2019, with investors attracted by high yields and outstanding market conditions.
Regional city centres across the UK are expected to outperform with higher sales prices and rental growth as the rise of city centre living continues. Manchester, Liverpool and Leeds have seen resurgent sales and rental markets in recent years.
The residential landscape is evolving; we’ve seen a shift away from student accommodation developments and an increase in the number of traditional residential schemes being developed in our city centres, which will continue over the next 12 to 18 months.
Pending changes to leasehold legislation are also set to increase transparency across the residential market which will create a more structured framework. In addition, a move towards more responsibility being placed upon the seller would streamline and improve industry conveyancing process, enabling easier entry into the residential market and bringing it broadly in line with recommended guidelines.
Whilst land is at a premium, we’re set to see a significant increase in city centre residential developments. These are primarily large-scale, institutionally owned developments with high specification amenities and facilities located in dense urban environments. Residential property management company Urban Bubble estimated approximately 13,000 new Buy to Let residential apartments will be on-stream within Manchester’s boundary by 2020.
Over the next five years, JLL expects average house price growth of 15% across the North West, with Manchester positioned as the most attractive city centre residential investment market in the UK with price growth over the next five years expected to grow by 21%. New development prices in Liverpool are expected to rise by 18%.
This growth is being driven by a number of factors including capital growth, excellent value for money and vibrant development plans across Liverpool and Manchester, which are breathing new life into city centres.
Peel Group’s £50bn Atlantic Gateway project, which includes a major residential development, is one of the regeneration projects in the pipeline. The scheme will unlock formerly underused land with projects, including the planned construction of Everton Football Club’s new stadium at Bramley Moore Dock, set to transform Liverpool’s North Docks.
Already, we can see the impact of the regeneration focus on the North Docks, with high-end schemes being brought forward including the grade two-listed Tobacco Warehouse, bringing hundreds of luxury duplex, loft-style properties to market.
A rise in SME developers entering the market, buoyed by growing support from government and better access to non-traditional funding sources is also set to boost supply of new stock.
Overall, we’re looking at an extremely buoyant property market with great prospects for developers who are bringing forward a number of landmark schemes which look set to shape our North West city skylines through 2019.