Using new research and analysis, estate agents Tepilo outline why Leeds is the best location in the UK to build new homes.
The government are forever being urged to build more new homes, while those in the property industry – including developers, designers, architects and house-builders – are always looking for ways to build new properties in fast and efficient ways.
When it comes to actually building new homes, though, there are some cities which are far more proficient than others. Research carried out by Argyll Property Partners, the mezzanine finance lender, has revealed Leeds is the best location for the creation of new households.
The Yorkshire city, a key legal and financial hub second only to London, is famed for its Victorian architecture, sporting heritage and thriving university – and it also happens to have a perfect set of attributes for new housebuilding.
According to analysis of official figures, Leeds provides the best combination of planning success, demand for homes, house price growth and value.
On average, new build homes in Leeds are worth 41% more than existing properties in the city. Leeds is one of the most affordable major cities in the UK – with an average house price of just over £150,000 – which makes it particularly appealing to first-time buyers and buy-to-let investors.
New builds, with their high sell-on value and widespread appeal, tend to offer good long-term returns on investment, which means competition for such properties is fierce.
This is further evidenced in Leeds, where the value of new homes in the area is increasing by 13% year-on-year – a reflection, in part, of booming demand.
Leeds has one of the largest local authorities in the UK, with nearly four times as many property sales compared to the monthly average for England. Some 95% of major residential applications are also approved by the city’s local authority, which has one of the best and fastest systems in the country.
Birmingham also performs strongly, while the local authorities in Cornwall, County Durham, Wiltshire, Bradford, the City of Bristol, Manchester, the East Riding of Yorkshire and Liverpool all made the top 10 when it comes to building new homes.
Leeds City Council is one of the best in terms of encouraging house building, approving nearly all of the major applications it receives. And it seems as if house builders are starting to catch on, with major new developments such as the Seacroft site in the east of the city just one of many in the pipeline over the coming years.
By contrast, developers are urged to avoid Surrey Heath, which according to the research is the worst location for developers to build new homes. Surrey Heath, a local authority in south-east England, is the least attractive for house-builders thanks to Surrey’s high property values – which means developers have to pay a premium price to secure land – and the difficulty of buying and selling homes in rural areas (which Surrey Heath covers).
Once built, new homes in Surrey Heath are typically worth 23% less than existing properties in the area. While this might sound like good news for struggling first-time buyers, one quick look at the average price in Surrey soon puts paid to that. Even homes that are 23% cheaper are still likely to set buyers back a pretty penny.
As we said above, selling such homes in the future may also prove problematic given the rural locations at play. Monthly transactions in the Surrey Heath area are 50% lower than the nationwide average.
The local council is also less likely to approve residential applications. While 75% of major residential applications are approved, this is still lower than the majority of local authorities in England.
Hambleton, Epsom & Ewell, Ribble Valley, Richmondshire, Pendle, Spelthorne, Three Rivers, Hammersmith & Fulham and Islington made up the top 10 worst local authorities for building new homes. The two London boroughs – Hammersmith & Fulham and Islington – aren’t aided by higher stamp duty, high land values and a decline in transactions in Prime Central London, which is making such places less attractive to developers.
The keys players when it comes to getting Britain building are developers and house-builders, so the more locations than can appeal to them – and actively encourage them – the better for us all. Leeds, Birmingham, Liverpool, Manchester and other major regional hubs in the South West and North East are managing that, but London and the South East is proving much less enticing, despite a large part of the population being concentrated in these areas.
More still needs to be done to increase the number of new homes on the market – but, for now, developers should have their eyes firmly trained on Leeds.