Understanding how external influences and key market drivers effect city centre construction is Delph’s bread and butter; how a region is being developed has a significant impact on its economic outlook, thereby providing us insight into new acquisition and investment opportunities.
Construction activity is routinely evaluated to provide markers of economic strength of a city or region. Deloitte’s Real Estate Regional Crane Surveys analyse this link between development and prosperity in detail.
The most recent surveys released on 30th January reported on construction activity across Manchester, Birmingham, Leeds and Belfast, and have sparked a lot of interest in the press. We are seeing our cityscapes and skylines changing more drastically than ever since the 2008 financial crash. Delph has long been developing in regional cities and it’s fantastic to see them transforming into such lucrative residential markets.
So, what does the latest Crane Survey tell us about construction in our UK regions? Here are Delph’s top take-homes:
1. The Big News: Manchester
Manchester is officially one of the fastest growing cities in Europe. Many of the cranes in the city are the result of the £300m Greater Manchester Housing Fund, part of the government’s Northern Powerhouse project. Simon Bedford, head of Deloitte Real Estate in the North West, said:
“Construction activity has not just matched 2007, it has completely blown those figures out of the water, demonstrating unparalleled scale and volume of development.”
Read the full report on Manchester.
2. London is falling behind
As The Times pointed out, London builders must catch up with the North.
The construction lull in London is spread across the board, with new office development in the capital at its lowest level in more than three years, as well as housebuilding hitting a wall. Meanwhile, as we know, we are seeing a boom of houses built in the UK regions.
The number of new developments outside London has risen to a record…40 projects to build 17,000 homes were under way in Manchester, Leeds, Birmingham and Belfast [in 2017]. Half of these were in Manchester, which recorded a 60 per cent increase in the number of homes under construction in urban areas, rising from almost 7,000 in 2016 to more than 11,000 in 2017.
In total, there were 81 new regional developments recorded in the Crane Survey, across sectors including offices, hotels, shops and schools, as well as homes.
In contrast with the North, London’s construction activity has dropped 9% in the last six months. The capital is no longer leading Britain’s construction economy and developers and businesses have a renewed confidence to leave London for new ventures further afield. London falling behind in development is something that has been on Delph’s radar for some time, and the reason we have set our focus to acquiring sites in regional cities.
3. Housebuilders are flocking to the regions
It’s no longer news that regional cities are enjoying a housebuilding boom. The test, now, will be to sustain this prominent level of development in coming years so that our housing shortage can be met with reasonable supply. If we are to reach the government target to build circa 220,000 more new homes by 2020, support of construction in our regions will be vital.
Construction at The Hallmark, Manchester
The figures in the Crane Survey demonstrate how seriously the housing targets are being taken and developers are striving to meet demand. This unparalleled surge of construction is being backed by investors confidently, aside strengthening business communities and an influx of new young professionals to regional cities; these are exciting times for Delph!
If you’re looking to fund a residential property scheme of 50 to 400 units in a UK regional hotspot, get in touch with Delph today: delphgroup.com/contact-us
What are your top take-homes from the Crane Survey? Comment here or get in touch on our social media channels, we’d love to hear from you: