on.point Northern England Residential July 211 Northern England housing shortage looms The Northern England economy is forecast to grow by an average 2.5% pa over the next five years. Although around 11, public sector jobs are likely to be lost over the next five years, there is still forecast to be a net increase of almost 2, jobs. Housing completions in Northern England, at 23, units in 21, have more than halved from their 27 peak. But with an additional 57, households expected to form each year during 213-233 Northern England is set for a significant shortfall in housing supply.
2 On Point Northern England Residential July 211 Introduction Welcome to the second annual report on the Northern England residential markets. Our report covers the three regions Yorkshire and the Humber, the North West and the North East and considers the economies and housing markets within these regions and across Northern England as a whole. We also look at the city centre apartment markets in Leeds, Liverpool and Manchester as well as investigating development, affordable housing and housing demand issues. With Northern regions set for a challenging few years it will be interesting to see how developers and Registered Providers adapt to the new but changing residential landscape. Average house price map across Northern England Executive summary The Northern England economy is forecast to grow by an average 2.5% pa over the next five years. Around 11, public sector jobs are forecast to be lost over the next five years but strong employment growth, in the financial and business service sector in particular, will lead to a net increase of almost 2, jobs. Average house prices in Northern England have fallen in recent months but over the past 1 years prices have increased by 98%, the equivalent of 7.1% pa, and higher than the national average. Prices in the main city centres have been more robust and broadly stable over the past year, often supported by restricted supply. Lettings markets are stronger with upward pressure on rental values in all the main city centres with tight supply a feature in most locations. Future housing demand is projected to be high in Northern England with almost 57, additional households expected to be created each year during 213-233. Over 7% of new households are expected to be single person households. The number of housing starts in Northern England has rebounded in recent quarters having bottomed-out in mid-29. But at 22,5 units pa housing starts are less than half the 26-27 peak level. Even if housing completions were to return to the 5, units a year delivered before the credit crisis, there would still be a shortfall of circa 7, housing units a year compared to projected demand. With such a return unlikely, and with the gap between demand and supply widening each year, Northern England looks likely to be beset with a shortfall in housing over the next 2 years or so.
On Point Northern England Residential July 211 3 Economy The economy in Northern England is set to grow by an average 2.5% pa over the next five years while employment growth is forecast to be.6% pa. These forecasts may not compare too favourably relative to some other regions of the UK but despite the expected public sector job losses and constrained household income prognosis Northern England will still see some significant growth and improvement over the next five years. Figure 1 shows how important the public sector is in both Northern England and the UK. It accounts for more than a quarter of all jobs and is forecast to shrink by around 1% pa over the next five years. The manufacturing sector is also set to shed more jobs but other sectors, most notably the financial and business services sector, distribution and hotels and construction, are all destined for significant job creation over the next five years. Figure 1. Northern England and UK employment by sector % share of all Growth forecast employment 21 211-215 % pa Employment by Northern UK Northern UK business sector England England Public sector 28.5 26.6-1.1-1. Distribution & hotels 22.7 21.8 1.2 1.3 Financial and business services 17.7 21.7 3. 3.3 Manufacturing 11.2 9. -1.4-1.4 Construction 6.1 6.6 1.7 1. Transport & communications 5.9 5.7 1.2 1.4 Other 7.9 8.7.2.5 Total 1. 1..6.9 Source: Jones Lang LaSalle, Oxford Economics In terms of quantum, and from a total workforce of around 6.9m in Northern England, around 11, public sector jobs are expected to be lost over the next five years. In contrast, financial and business services, distribution and hotels and construction are projected to add around 194,, 97, and 36, jobs respectively. A net increase of 194, posts is forecast during 211-215. Figure 2 shows how much the Northern England economy shrank during the UK economic recession but it also shows the positive growth and recovery during 21. In fact, the Northern England economy grew by 1.8% during 21, a faster rate than the 1.6% seen throughout the UK. Figure 2. GDP growth forecasts Northern England by sector GDP growth (% pa) 23-27 28-29 21 211-215 Public sector.9 1.2.9 -.3 Distribution & hotels 2.6 -.6 3.8 3.4 Financial and business services 7.1-2.4-3. 4.4 Manufacturing.5-1.5 6.3 2.5 Construction 2.5-4.3 1.6 3.4 Transport & communications 3. -1.8 1.5 3.1 Other -.1 1. 3.5 2.4 Total 2.3 -.9 1.8 2.5 Source: Jones Lang LaSalle, Oxford Economics Of greater importance is that the Northern England economy is forecast to expand by 2.5% a year during 211-215. To put this into context, this rate of growth is stronger than the 2.3% pa the region experienced in the ten years prior to 28 and is higher than the 2.2% pa achieved in the five years after the early 199s recession. Aligned with the employment forecasts, Figure 3 shows that the most significant driver of GDP growth over the next five years is expected to be the financial and business services sector where growth averaging 4.4% pa is forecast. The distribution and hotels sector, the construction industry and the transport and communications sector are all forecast to see annual average GDP growth in excess of 3% pa over the next five years. Figure 3. GDP growth forecasts Northern England by sector % change pa 211-215 % change pa 5 4 3 2 1-1 Source: Jones Lang LaSalle, Oxford Economics Figure 4. GDP growth forecasts Northern England (% pa) 4 3 2 1-1 -2-3 -4-5 Public sector Distribution & hotels Financial & business services Manufacturing 28 29 21 211 212 213 214 215 Source: Jones Lang LaSalle, Oxford Economics Construction Transport & communications In terms of timescale, GDP growth is forecast to improve from 1.8% in 21 to a peak of 2.9% in 213 before easing back to a still quite strong 2.6% in 215 (Figure 4). The North West is the largest regional economy in Northern England accounting for around 48% of employment and output. Yorkshire and the Humber accounts for circa 36% with the North East the smallest region at 16%. Other Total
4 On Point Northern England Residential July 211 Housing markets House prices in Northern England have increased by a significant 98% over the past 1 years, equivalent to 7.1% pa. It may be surprising but this is notably higher than the 83% rise in prices seen across England & Wales. Yorkshire & the Humber has seen the highest growth at 7.2% pa, the North West 7.% pa and the North East 6.7% pa. Over the past 1-15 years Northern England house prices have experienced some notable highs and lows (Figure 5). Following the early 199s recession, house prices initially increased at a relatively slow pace but growth accelerated to over 2% pa for the three years 22-24. Following a further period of slower growth, prices fell by 17.% from peak to trough between February 28 and June 29 in the aftermath of the global credit crisis. The average house price in Northern England, at 115,, is now back to its mid-29 low and to the level last seen in late-24 (Figure 6). The average house price in Northern England is significantly below the 161, average across England & Wales. Regionally, house prices are highest in Yorkshire & the Humber at 121, compared with 116, in the North West and 11, in the North East. In fact, the North East has the lowest average house price of any region in England & Wales. Looking within Northern England in greater detail, it can be seen from Figure 7 that there is quite a range of average house prices across the region. Figure 7. Average house price map across Northern England Figure 5. House price growth in Northern England House price growth (%pa) 3 25 2 15 1 5-5 -1-15 -2 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 Source: Jones Lang LaSalle, Land Registry More recently, house prices rebounded between June 29 and August 21 when prices in Northern England increased by 4.6%. However, from August 21 until March 211 average house prices have fallen back by 4.4%. The most marked decline in house prices across Northern England over the past year has been in the North East where values are a sizeable 9.3% lower. Price falls in the North West of 2.9% and of 5.3% in Yorkshire & the Humber in the year to March 211 are both higher than the 2.3% average decline across England & Wales. Figure 6. Average house prices across Northern England Source: Jones Lang LaSalle, Land Registry Perhaps the most notable change to housing markets in recent years has been the sharp decline in housing transactions (Figure 8). There were around 34, housing transactions in Northern England in both 22 and 26 but this has declined to less than 15, transactions in both 29 and 21, approximately a 55% fall. The largest and most active housing market region is the North West. In 21 there were around 7, transactions whereas there were approximately 55, and 25, in Yorkshire & the Humber and the North East respectively. 2 175 Figure 8. Housing transactions in Northern England Average house price ( s) 15 125 1 75 5 25 Dec 97 Dec 98 Dec 99 Dec Dec 1 Dec 2 Dec 3 Dec 4 Dec 5 North East North West Yorks & Humb Eng & Wales Source: Jones Lang LaSalle, Land Registry Dec 6 Dec 7 Dec 8 Dec 9 Dec 1 Dec 11 Number of housing transactions (s pa) 4 35 3 25 2 15 1 5 1996 1997 1998 1999 2 21 22 23 24 25 26 27 North East North West Yorks & Humb Source: Jones Lang LaSalle, Land Registry 28 29 21
On Point Northern England Residential July 211 5 Housing demand Northern England is expected to see the formation of over 1.14 million additional households during the 2 years 213-233. The increase is forecast to be significantly more than the 73, new households expected to have been created in the 2 years 1993-213. This degree of household formation is likely to place great strains on the region s infrastructure and housing supply and it will be interesting to see how the authorities and private developers rise to meet this challenge. The number of households is projected to rise from 6.54 million to 7.68 million between 213 and 233. This is a 17% increase and equates to approximately 56,9 new households a year. The three regions of Northern England are expected to see different rates of household growth in the future (Figure 9). Yorkshire and the Humber, Northern England s second largest region, is projected to see the highest increase over the next 2 years. The 2.33 million households in 213 are projected to grow by 54, households at an annual rate of 27, a year. Figure 9. Regional household projections in Northern England 4 Number of households (m) 3 2 1 North East Yorks & Humb North West 1993 23 213 223 233 Source: Jones Lang LaSalle, CLG The North West, currently the largest Northern England region by number of households, is expected to see an additional 429, households over the next 2 years at an annual rate of 21,5. The North East is forecast to see an extra 169, households increasing by 8,5 a year. Figure 1. City household projections in Northern England Number of households (s) 5 4 3 2 1 Liverpool Manchester Leeds 1993 23 213 223 233 Source: Jones Lang LaSalle, CLG In terms of cities, Leeds is projected to witness the greatest increase in household formation (Figure 1). The number of households is expected to rise from 365, in 213 to 472, by 233, an aggregate increase of 17, and an annual increase of 5,4. Manchester city centre is projected to see an annual increase of 2,8 households whereas Liverpool is expected to experience an annual uptick of 1,2 households. In percentage terms Leeds is forecast to expand by 29%, Manchester by 25% and Liverpool by 12% between 213 and 233. Figure 11. Northern England household projections Figure 12. Northern England change in number of households No. of households (s) 213-233 1 8 6 4 2 Multi person Source: Jones Lang LaSalle, Land Registry Average annual 213-233 change (s) change 1993-213 213-233 s % Northern England 36.6 56.9 1,138 17 North East 5. 8.5 169 15 Yorks & Humb 16.6 27. 54 23 North West 15. 21.5 429 14 Liverpool.5 1.2 24 12 Manchester 2.4 2.8 55 25 Leeds 3.5 5.4 17 29 Source: Jones Lang LaSalle, Oxford Economics Whilst there are currently almost twice as many multi person households in Northern England compared to one person households, this is expected to change dramatically over the forthcoming two decades. One person households are predicted to increase by 35% whereas multi person households are expected to see a significantly more modest 8% rise. These equate to an aggregate increase of 815, one person households and 33, multi person households, the equivalent of 41, one person households a year and 17, multi person households (Figure 12). Over 7% of new households are expected to be single person households. One person The average household size in Northern England is expected to fall from 2.26 people in 213 to 2.12 people by 233. The average household size has already contracted significantly having been 2.46 persons in 1991.
6 On Point Northern England Residential July 211 Housing development The number of housing starts in Northern England has recovered significantly since mid-28 but is still less than half the level seen during the 24-27 period. The overall number of completions has halved since the peak but private unit completions are down 63%. There has also been a shift towards building houses as opposed to flats. The most significant conclusion, however, is that the current rate of completions, at less than 23, units a year, is 6% below the projected level of household formation, at 57, pa. The number of housing starts in Northern England plummeted by 72% following the credit crisis, down from 47, units pa in the year to Q4 27 to a low of just 12,1 units pa by Q2 28. There has been a notable recovery in housing starts since 28 but at just 22,5 units pa by end 21 the total is still 52% below the 27 level. The number of housing completions did not see quite as sharp a fall but has also ended up around 5% below the 27 peak. Completions in the year to Q4 21 were 23, units, down from a peak of 46,5 units in 27. Figure 13. Northern England housing starts and completions Number of homes (s) 6 5 4 3 2 1 2 Q4 21 Q4 22 Q4 23 Q4 24 Q4 Starts Completions Source: Jones Lang LaSalle, CLG 25 Q4 Broadly speaking, the three Northern England regions have seen a similar decline in completions (Figure 14). The North West, which has historically delivered the greatest amount of new housing, has seen a 26 Q4 27 Q4 28 Q4 29 Q4 21 Q4 slightly higher peak to trough fall, down 55%, followed by a 5% drop in Yorkshire & Humberside and a lesser 44% in the North East. While there has been a dramatic decline in the number of private units completed in recent years, there has been a steady increase in the number of affordable homes finished (Figure 15). The number of private units completed peaked at nearly 4, units in 25-26 but has fallen a staggering 63% to just 14,6 units in 29-21. Meanwhile, the number of affordable homes completed has increased from 3,6 in 23-24 to a high of 8, units in 29-21. The dramatic switch in tenures has meant that the private sector s share of all completions has declined from a peak of 9% in the years 23-26 to just 65% in 29-21. Figure 15. Northern England housing completions by tenure 45 4 35 3 25 2 15 1 5 Number of homes (s) 1999-2-1 21-2 22-3 23-4 24-5 25-6 Private Social rent Intermediate Source: Jones Lang LaSalle, CLG The past decade or so has seen a striking change in the type of housing that has been built in Northern England. In 1999-2 just 11% of homes built were flats, but in 27-28 39% were apartments. Over the past 2-3 years this trend has reversed with 26% of all completed homes in 29-21 being flats (Figure 16). The most prominent changes have been a 4% fall in two bedroom flat completions and a 25% increase in the number of 3 and 4 bedroom houses (Figure 16). 26-7 27-8 28-9 29-1 Figure 14. Northern England housing completions by region 5 Number of homes (s) 4 3 2 1 1999-2-1 21-2 22-3 23-4 24-5 25-6 26-7 27-8 28-9 29-1 21-11 Figure 16. Northern England housing completions by type and 2 bed house 3 bed house 4+ bed house North East Yorks & Humb 1 bed flat 2 bed flat Other North West Northern England Source: Jones Lang LaSalle, CLG Source: Jones Lang LaSalle, CLG % of homes 1 9 8 7 6 5 4 3 2 1 1999-2-1 21-2 22-3 23-4 24-5 25-6 26-7 27-8 28-9 29-1
On Point Northern England Residential July 211 7 Affordable housing Housing providers have been faced with radical changes in housing policy since the coalition government came to power in May 21. Included in tough public spending cuts were significant changes to the way affordable housing is to be funded. However, the HCA has a target to deliver 15, additional affordable homes across the country during 211-215, including 56, low cost homes. The most notable change is the introduction of flexible tenancies whereby Registered Providers are able to charge up to 8% of market rent. In theory this affordable rent model allows Registered Providers to charge higher social rents than they have done in the past and that in turn the increased cashflow will enable them to leverage greater borrowing to fund new development. A second change is that the process of staggered bidding rounds has changed to a four year allocation. Registered Providers were asked to submit bids for the 2.2billion of new funding that will be available over the period 211-215. Bids had to be submitted in May 211 with the outcomes announced in July. Figure 17. Chevin Housing Association bought 28 units at Granary Wharf, Leeds The impact of these changes to affordable housing in Northern England are still being absorbed and assessed. The impact, however, is expected to be quite different compared to London and the South East. In many parts of Northern England 8% of market rent will not be significantly higher than the existing social rent. Additionally, especially given the current economic and employment conditions and the changes to the benefits system, there is concern about the ability of tenants to pay the possible higher rents. It should be noted that the new affordable rent model only applies to new tenancies. The new funding models will certainly change the way Registered Providers work and only those that adapt and respond to the challenge are likely to succeed. We expect the delivery of affordable housing will reduce over the next few years compared to the recent past as a result of these changes but anticipate greater consideration of alternative funding models, partnerships and joint ventures with private investors. We have little option but to take on more risks but will continue to innovate and challenge ourselves in developing our business to meet the needs of our customers. Mark Patchitt, of Regeneration, The Riverside Group A number of affordable housing deals have progressed in Northern England despite these changes. Notable transactions include the sale of 28 units at the ISIS development Granary Wharf in Leeds to Chevin Housing Association and the sale of a site to Countryside Properties to provide 75 units at Saxon Park, Warrington where Plus Dane Housing Group agreed to purchase the units upon completion. Additionally, The Riverside Group agreed to purchase 28 units from Sainsbury s at Penrith New Square in Penrith where a further 2 units are to be sold to a Registered Provider on a shared ownership basis. Figure 18. The Riverside Group are buying 28 units at Penrith New Square, Penrith
8 On Point Northern England Residential July 211 Manchester Manchester has been starved of new city centre apartment developments over the past few years. So much so that there is just a handful of new schemes in the city centre with units being marketed. The latest scheme is Eastbank; a scheme being developed by Peel Land & Property and Manchester City Council, located in the Ancoats & New Islington part of the city. It comprises two elements. The Mews is a collection of 3 two and three bedroom townhouses and 45 one and two bedroom apartments. The first of the town houses, which start from 159,999, were released in May and were all reserved within a couple of weeks. A further release is due in June. The other element of the development is the Cube where all bar 5 of the 33 one and two bedroom apartments have been sold. Outside of the city centre, work is continuing at the Peel Group s MediaCityUK in Salford Quays where the BBC and ITV are partrelocating. There are two residential buildings, TheHeart and NumberOne, totalling 378 units. 165 units have so far been sold, 213 remain with 35 of these being rented by the developers. Figure 19. Sales and rentals have been strong at the Peel Group s MediaCityUK at Salford Quays majority of loans which is restricting potential first-time-buyer demand. The low level of interest rates, and the prospect that they might rise soon, is further fuelling current demand. Despite the improved market, sales prices have not really moved over the first six months of 211. On an annual basis sales prices in Q2 211 are 1.3% higher than a year earlier. Figure 2 shows typical pricing for prime and average developments in the city centre. Figure 2. Typical sales prices in Manchester ( psf) Price ( psf) 35 3 25 2 15 1 5 Prime Source: Jones Lang LaSalle Average The lettings market is extremely buoyant. There is very little new stock coming to the market and, with rents increasing quite strongly, renewal activity is high and new lettings consequentially low. The lack of availability through typical market churn is further stoking rental values. MediaCityUK is really the only new development where tenants can currently rent new apartments. The rental market also has to gear up to cater for around 1, students over the summer months and with so little new product available the dynamics of the city centre rentals market will heavily favour landlords as the city becomes fully occupied once more. The only other scheme scheduled for completion is the newly renamed Nuovo, a development of 166 apartments on the edge of the Northern Quarter of the City. The scheme originally stalled in 28 but UK Land & Property, with assistance from regeneration organisations New East Manchester and the HCA, will begin construction again in mid-211 with completions planned for the second half of 212. The sales market has been more vibrant and active during the first half of 211 compared to the second half of 21. Demand has picked up and the number of sales has increased. There is also a positive sentiment in the market which is buoying both buyers and sellers. There are also signs that the mortgage market is beginning to relax slightly although 2-25% deposits are still required on the Rental values have increased by 1.% in the year to Q2 211 and by 1.4% during Q2 alone. Typical one bedroom apartments are currently letting for 625 pcm with two bedroom flats commanding circa 8 pcm. The best properties are fetching 8 pcm for one bedroom and 1,2 pcm for two bedrooms (Figure 21). Figure 21. Typical rental values in Manchester ( pcm) Rental value ( pcm) 14 12 1 8 6 4 2 1 bed 2 bed Prime Average Source: Jones Lang LaSalle
On Point Northern England Residential July 211 9 Liverpool There are several schemes with units on the sales market. These include Neptune Developments and Countryside Properties Mann Island scheme, Grosvenor's One Park West, and LAGP s Kings Dock Mill. The 175 unit first phase of Mann Island, located by the Albert Dock, is selling well since completing in January 211. One bedroom apartments are typically priced around 12, with two bedroom flats at 16,- 18,. Over 1 had been sold by end-may with the remaining either for sale or unreleased. Prices being achieved are in the 25 psf region. Figure 22. Over 1 units have sold at Neptune Developments and Countryside Properties Mann Island The residential sales market has improved notably during the first half of 211. We have seen an increase in applicants and viewings, however mortgage market restrictions are continuing to constrain potential demand. Incentives on new developments as well as shared equity opportunities are helping to boost interest and sales. Despite the weaker market conditions compared to three to four years ago, available supply is still quite low in Liverpool s city centre. However, this has not led to any increases in sales prices during the first half of 211. On an annual basis sales prices in the city centre are 1.9% lower than a year ago following price falls during Q4 21. The lettings market in Liverpool city centre is pretty active although not as strong as in some UK cities and regions. While high demand is further supported by a large student population as well as displaced applicants from the sales market, there is sufficient vacant supply to absorb this high demand. These dynamics have meant that rental values have not changed during the first half of 211. Over the past year typical rental values are 1.7% higher following small increases during Q3 21. Typical one bedroom apartments are currently letting for 5-6 pcm with two bedroom flats commanding 7-8 pcm. The best properties are fetching 7 pcm for one bedroom and 85 pcm for two bedrooms (Figure 24). The 192 units at Kings Dock Mill are still going through the completion process with investors. One bedroom properties are on the market at around 114,, with two bedroom apartments priced at around 16,. Around 6 units which were reserved pre market crash have completed at prices typically in the region of 3 psf. There are no other residential schemes currently under construction although greater interest and discussions have taken place regarding kickstarting schemes that were put on hold following the market downturn in 27-28. Figure 23 shows typical pricing for prime and average developments in the city centre. Figure 24. Typical rental values in Liverpool ( pcm) Rental value ( pcm) 1 8 6 4 2 1 bed 2 bed Prime Average Source: Jones Lang LaSalle Figure 23. Typical sales prices in Liverpool ( psf) 3 25 2 15 Price ( psf) 1 5 Prime Source: Jones Lang LaSalle Average
1 On Point Northern England Residential July 211 Leeds There are just two live developments in Leeds city centre. Granary Wharf, where prices are typically 25 psf and Saxton, the Urban Splash scheme, where values are typically in the region of 2 psf. The 282 unit, ISIS developed Granary Wharf scheme, has been in constant and steady demand since shortly before its completion in Autumn 29. Apartments have continued to sell during the first half of 211 with the majority of demand still from owner-occupiers. At the lower priced Saxton development, sales have also been constant with both developments offering a shared equity scheme which has proved popular with first time buyers. Figure 26. Typical sales prices in Leeds ( psf) Price ( psf) 3 25 2 15 1 5 Prime Average Source: Jones Lang LaSalle Figure 25. Shared equity scheme has been popular at the Urban Splash Saxton development The lettings market is exceptionally strong at present with demand high and available supply tight. Tenant demand has been boosted by the inability of buyers to secure affordable mortgage finance but there remains a desire among the Leeds population to live in the city centre. There is a general shortage of rental stock available although there is a particular shortage of one bedroom apartments. This is leading to high renewal activity and to low void rates. However, the demand and available supply pressure has barely forced rents up over the past 12-18 months, up just.6% in the year to Q2 211, although there are increasing signs that rents will rise soon. Other than these two schemes there are no other developments currently under construction in Leeds city centre and it seems unlikely that any will begin on site in the next 6-12 months. The sales market for Leeds city centre apartments has improved during the first half of 211 and has led to heightened confidence. Most significantly, transaction levels have increased, despite being low by historic standards, as many would-be buyers have entered the marketplace having been on the sidelines for the past few years. Mortgage finance, however, is still a constraining factor, especially in terms of deposits, although the trend of parents helping their children to buy has emerged more strongly during the first half of 211. Low interest rates and the perception that house prices are at or very close to their cyclical low are encouraging potential buyers. The Leeds market is further characterised by a shortage of stock even though the volume of property on the market increased during the early months of the year. There is a particular shortage of apartments in the older conversion blocks of the city centre. Typical one bedroom apartments are currently letting for 55 pcm with two bedroom flats commanding circa 75 pcm. The best properties are fetching 65pcm for one bedroom and 95 pcm for two bedrooms (Figure 27). Figure 27. Typical rental values in Leeds ( pcm) 1 Rental value ( pcm) 8 6 4 2 1 bed 2 bed Prime Average Source: Jones Lang LaSalle Overall, sales prices in Leeds city centre have barely moved over the past year. They were static during the first two quarters of 211 as well as Q4 21 but increased marginally in Q3 21. On an annual basis prices were.3% higher in the year to Q2 211. Figure 26 shows typical pricing for prime and average developments in the city centre.
On Point Northern England Residential July 211 11 Conclusions The economy in Northern England is not forecast to be as strong as the UK overall during the next five years. However, with an annual average expansion rate of 2.5% pa the region is still set for strong GDP growth despite public sector cutbacks. The public sector is forecast to shed around 11, jobs within five years across all three northern regions but private sector job creation is expected to more than compensate for this loss. Almost 2, jobs are set to be generated in the financial and business services sector alone leading to a net increase of 194, posts across all sectors over the next five years. A total of around 73, additional households are projected to be created in Northern England over the 2 years 213-233. Around 41, of the 57, additional households a year will be one person households. However, with Northern England completing less than 46, homes a year even at its peak in 26, it is clear that the housing industry will struggle to deliver the required quantum of housing in the near and medium term. Indeed, with housing completions running at less than half the rate of annual household growth for the past few years, and with this likely to continue for the next few years at least, the shortfall in housing supply for Northern England looks set to widen to crisis levels. So, on the one hand Northern England looks set for a difficult few years from an economic, household finance and employment point of view, but on the other hand a significant shortfall in housing supply relative to projected demand is likely to put upward pressure on prices and rental values, especially in the medium term.
Contacts Stephen Hogg North Agency & Development +44()161 236 8793 stephen.hogg@eu.jll.com Ian Thomlinson North Land & Development +44()161 828 6497 ian.thomlinson@eu.jll.com Neil Chegwidden Residential Research +44()2 787 557 neil.chegwidden@eu.jll.com Jon Neale Residential Research +44()2 787 558 jon.neale@eu.jll.com Simon MacKay North Valuation +44()161 238 7423 simon.mackay@eu.jll.com Anthony Stankard Manchester Agency +44()161 238 74 anthony.stankard@eu.jll.com Guy Ackernley Leeds Agency +44()113 25 3333 guy.ackernley@eu.jll.com Martyn Green Liverpool Agency +44()151 242 649 martyn.green@eu.jll.com Richard Petty Affordable Housing +44()2 787 5971 richard.petty@eu.jll.com Northern England Residential July 211 OnPoint reports from Jones Lang LaSalle include quarterly and annual highlights of real estate activity, performance and specialised surveys and forecasts that uncover emerging trends. www.joneslanglasalle.co.uk COPYRIGHT JONES LANG LASALLE IP, INC. 211. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. No liability for negligence or otherwise is assumed by Jones Lang LaSalle for any loss or damage suffered by any party resulting from their use of this publication.