As property price growth will most likely be subdued in London, a couple of regional cities across the country are expected to outperform the capital, a new report has revealed.
Residential price growth across the UK is estimated at 0.5%, going up to 1% in London. The capital’s prime property market, however, is forecast to remain flat, real estate advisor JLL revealed in their latest report.
When it comes to house price growth, only little movement is expected throughout the year, as the Brexit uncertainty, inflation and affordability may hit harder.
Manchester for example, the report points out, has experienced low levels of supply over the last couple of years, pushing up prices and rents in return and little relief is expected for the year to come.
In Edinburgh, the market for suburban family homes is seen strong demand as well as Build to Rent in the city centre and further down towards Leith. Birmingham, the recent beneficiary of the first big Housing Growth Fund investment into 2,000 new homes, is also getting more attention after being overshadowed by Manchester for the last couple of years.
“Legislative changes, such as stamp duty, and the uncertainty around Brexit have led to weaker investment demand from overseas as well as domestic buyers. Alongside an overstretched owner occupier market, this will keep a lid on price pressure,” said Andrew Frost, leader director of UK residential at JLL.
“At the same time, build costs will see significant inflation as the devalued pound sterling hits imports while the Mayor of London has continued to push for bigger affordable housing contributions. As a result, in contrast with the nearly 24,000 homes built in London during 2015, 2017 levels are expected to fall back closer to 16,000.”
“The challenges for the Mayor to use public land, planning and investment to stimulate supply are steep. There is much to be encouraged by so early on in his tenure, but his oft-used phrase of it’s a marathon, not a sprint is only too true. A strong, stable political backdrop for housing policy aligned with the creation of the new London Plan and Government White Paper will be an important handrail for an industry in need of guidance,” he added.
The report basically calls 2017 the year of “proptech”, as 2017 will be the year in which innovative techniques will be used more broadly in residential construction.
‘With a shrinking and destabilised workforce, the need to go off-site will become ever more critical and the first big steps will take place in 2017. Aligned with this shift, and perhaps just as important, is the need for greater adoption of Building Information Modelling or BIM’, Frost pointed out.