A new report from professional services firm JLL has predicted a stable housing market and moderate price growth over the next five to ten years.
It’s a ‘new housing paradigm’ according to the firm, one which they suggest should be embraced and welcomed, despite the fact that it makes for dismal reading for investors, homeowners and developers looking for significant gains on the value of their housing stock.
JLL says: “It is good for government, the economy, buyers, sellers and industry participants. But it will take some getting used to,” going on to suggest that they believe housing prices will rise by 2.5% on average for the next five years.
It would mark a shift from the explosive and volatile UK housing market in the medium-term, something which could help the growing number of young people struggling to climb aboard the property ladder amidst increasingly expensive starter properties.
Perhaps the headline news from a Yorkshire-centric perspective is their reckoning that regional city centres like Leeds are expected to outperform the rest of the UK market as sales and rental prices climb ever higher thanks to a renewed interest in city-centre living amongst younger people.
Indeed, JLL singled out Leeds as the standout market to keep an eye on for rental growth over from 2018 to 2022, saying: “City living has gained strong momentum in Manchester, Liverpool and Leeds over the past three years and, together with an active student market, has pushed demand in both the sales and lettings markets notably higher.
“With housing supply in these city centres severely constrained, prices and rents have soared. Despite these strong increases we still anticipate further upward pressure over the next five years.
“Growth rates may not be as strong as the past three years but uplifts of three to four percent per year are both significant and higher than UK averages.”
JLL suggest that the build to rent market in Leeds is one of the most active across all of the UK’s city centres, with demand being fuelled by young professionals and affluent students, who are increasingly opting for non-student accommodation. Accordingly, they predict average rental value growth of 3.5 percent per year over the next five years.
Additionally, JLL note there are currently 7,789 built to let properties currently in the pipeline in Leeds City Centre.
Overall, they predict the Northern English growth average to sit somewhere around 1.7%. However, Manchester and Leeds are set to significantly outperform that with the growth of 2.7% and 2% respectively, ahead of Liverpool with 1.8% predicted growth.
Added to that is strong employment growth, which should be around 1.3% per annum in Manchester over the same four years, whilst Leeds sees a 0.4% growth rate.