Northern England Forecasts UK Living Research | 2020 Living with 2020 vision Living with 2020 vision Glasgow Edinburgh
Homes needed Average supply UK pa next 10 years: pa past 10 years: Homes needed Average supply pa next 10 years: pa past 10 years: 1,300 1,150 2,100 1,800 Homes needed Average supply Engines pa next 10 years: pa past 10 years:
Population Salary to house 300,000 160,000 aged 15-34: price ratio: Population Salary to house aged 15-34: price ratio: for 33% 4.6 33% 8.6 Population Salary to house Business strength: aged 15-34: price ratio: Banking and green energy Business strength: Technology and financial services Growth Manchester research and development 25% 7.8
Homes needed Average supply pa next 10 years: pa past 10 years: 2,500 1,150 Leeds
The UK’s seven largest regional economies Homes needed Average supply Population Salary to house pa next 10 years: pa past 10 years: aged 15-34: price ratio: are hugely important to the prosperity 1,200 1,550 of the UK. 40% 7.0 Business strength: Digital, creative and media Population Salary to house This report demonstrates that the city centre residential markets within these aged 15-34: price ratio: regions are all thriving and showing numerous signs of positive growth. 31% 6.6 Together the big seven regional UK cities account for 17.5% of UK GDP. Business strength: Birmingham Legal and professional services Their average GDP per capita is £32,500pa, 6.6% above the UK average. Such is their significance that the Government has identified these cities as Homes needed Average supply engines of growth to boost the performance of the UK economy as a whole. pa next 10 years: pa past 10 years: The UK2070 Commission, chaired by Lord Kerslake, has set out seven Liverpool 4,000 900 national priorities to pump prime these regional economies. At the heart of the action plan is accelerating devolution and encouraging the creation of Homes needed Average supply major specialist regional employment hubs. pa next 10 years: pa past 10 years: Population Salary to house aged 15-34: price ratio: JLL has identified existing business strengths in each of the major regional 850 750 cities. These strengths are outlined on the map on this page demonstrating 32% 7.0 that each city is starting from a strong position to encourage growth in a Business strength: Automotive and manufacturing particular sector. But growing these employment hubs should be used as a Population Salary to house way to facilitate growth in other sectors in each of the cities. aged 15-34: price ratio: The regional cities are already attracting proportionally higher levels of 34% 4.9 students and young professionals than London, as the map shows. Business strength: Scientific research and development If the regional giants can do more to retain talent by growing their respective employment hubs, all of them boast fundamental living Bristol advantages over the UK Capital – not least, they are all significantly more affordable places to buy a home. Their ability to offer a more balanced live- London work package could just be their major trump card for their future growth. Homes needed Average supply pa next 10 years: pa past 10 years: Homes needed Average supply 1,700 1,050 pa next 10 years: pa past 10 years: 66,000 20,000
Population Salary to house aged 15-34: price ratio: Population Salary to house 36% 9.4 aged 15-34: price ratio: Business strength: Data at Local Authority level Engineering and new start ups 30% 12.9
Source: JLL, Oxford Economics, MHCLG, CACI, ASHE, Land Registry
2 3 Living with 2020 vision Living with 2020 vision
Manchester • The appeal of living in Manchester’s city centre continues to • Price growth was subdued in 2019, mainly the result of several Northern increase strongly as the local economy and population grows. schemes completing. • This has led to an exciting pipeline of residential development • The delivery of private for sale units will slow over the next three both for sale and rent, further enhancing the appeal for residents. years, providing support for higher sales prices. • The five year sales price forecast is notably higher than the UK • Several multifamily (build to rent) developments will complete average and the highest forecast of any UK city. The forecast over the next two years, providing an exciting array of rental units. England would be higher but for the strong supply side story. • We expect rents to rise strongly over the next five years, reflecting both heightened demand and better quality stock. Economic and residential Average sales price Average multifamily Average rent £pcm Sales price growth Rental growth (2019 % change) net yield (2019 % change) forecast forecast 2 bedroom flat (typical yield range) 2 bedroom flat (cumulative, next 5 years) (cumulative, next 5 years) performance £257k 4.25% £1,145 17.1% 16.5% (0.8%) (4.25-4.50%) (0.9%)
• The economies of the North West and Yorkshire & the Humber will be two of the strongest performing economies in the UK Liverpool over the next five years. • Liverpool will continue to benefit from robust economic and • Institutional investment in the residential sector is gathering • The region’s key cities are forecast to be the main drivers of this population growth, albeit more modest than Manchester. pace with three large institutionally funded multifamily (build to outperformance. • The city centre is constantly improving with owner-occupiers, rent) schemes currently under construction. investors, renters and developers buying into a modern, trendy • We expect sales price growth and rental growth to be reasonably • The Northern Powerhouse Government initiative will support and progressive city. strong and steady over the next five years. this expansion with further stimuli expected to be announced. • High quality stock is in short supply in the city centre, particularly for owner-occupiers. • Manchester is forecast to see both the highest sales price and Leeds rental growth of any UK city over the next five years, despite Manchester Average sales price Average multifamily Average rent £pcm Sales price growth Rental growth a higher volume of development. Leeds and Liverpool face (2019 % change) net yield (2019 % change) forecast forecast individual issues that are likely to dampen price and rental growth 2 bedroom flat (typical yield range) 2 bedroom flat (cumulative, next 5 years) (cumulative, next 5 years) Liverpool over the next few years. £195k 4.75% £1,000 13.1% 14.8% (0.0%) (4.75 to 5.00%) (0.0%)
Leeds • The Leeds economy is predicted to grow very strongly over the • Sales price growth is expected to be modest over the next two Economic and demographic forecasts medium-term although the population is expected to increase years before bouncing back strongly from 2022 onwards. Rental only modestly. growth will be consistent with multifamily (build to rent) schemes (2020-2024 % change pa) • The longer-term outlook is looking brighter now that HS2 has being delivered. been given the go-ahead by the new Conservative Government, • There are a few multifamily schemes in the development pipeline GVA Employment Population although the route to Leeds could still be some way away. in the city centre which will help to push rents for the whole growth growth growth • Re-sales price growth was strong during 2019, mainly driven by a market higher. lack of available new property to buy. Manchester 2.7 1.3 1.1 Leeds 2.3 0.8 0.4 Average sales price Average multifamily Average rent £pcm Sales price growth Rental growth Liverpool 2.1 0.7 0.4 (2019 % change) net yield (2019 % change) forecast forecast 2 bedroom flat (typical yield range) 2 bedroom flat (cumulative, next 5 years) (cumulative, next 5 years) £190k 4.35% £895 13.7% 14.2% (5.6%) (4.25-4.50%) (0.0%)
Source: JLL, Oxford Economics. Note: Sales price and rental growth, both historic and forecast, is for new-build and modern stock.
4 5 Northern England Forecasts
Manchester Leeds % pa 2020 2021 2022 2023 2024 2020-4 % pa 2020 2021 2022 2023 2024 2020-4
Prices 2.5 3.0 3.5 3.5 3.5 17.1 Prices 1.0 1.5 4.0 3.5 3.0 13.7 Rents 3.0 3.0 3.5 3.0 3.0 16.5 Rents 2.0 2.0 3.5 3.0 3.0 14.2
Liverpool % pa 2020 2021 2022 2023 2024 2020-4 UK
Prices 1.5 2.5 3.0 3.0 2.5 13.1 % pa 2020 2021 2022 2023 2024 2020-4
Rents 2.5 2.5 3.0 3.0 3.0 14.8 Prices 1.0 2.5 4.0 3.5 3.0 14.8 Rents 2.0 2.5 2.5 2.5 2.0 12.0
Stephen Hogg Louise Emmott Robert Hogarth Kieran McLaughlin James Lockwood Head of North West and Residential Agency Residential Investment Residential Land Residential Valuation Residential UK Regions and Development and Development [email protected] [email protected] [email protected] [email protected] [email protected] +44 (0) 161 238 7402 +44(0) 161 238 7403 +44(0) 161 238 6253 +44 (0)161 828 6439 +44(0) 161 238 6277
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