Derby City Living Prospectus

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Derby City Living Prospectus Derby City Living Prospectus October 2014 CONTENTS Page No. 1.0 INTRODUCTION 2 2.0 DERBY OVERVIEW 3 3.0 OVERVIEW OF DERBY RESIDENTIAL MARKET 4 4.0 THE REGENERATION OF DERBY CITY CENTRE 7 5.0 THE DERBY ECONOMY 8 6.0 COMPARISON OF DERBY CITY CENTRE AND OTHER CITY CENTRE AREAS 10 7.0 SITE AVAILABILITY AND OPPORTUNITY FOR RESIDENTIAL DEVELOPMENT 11 8.0 DERBY CITY LIVING FUND 12 9.0 CONCLUSIONS 13 1.0 Introduction 1.1 Derby City centre has undergone a major transformation over the past decade and now provides the heart of a 21st Century City including an attractive environment with the River Derwent flowing through the City centre as well as popular retail and leisure facilities creating a popular place to visit and stay. 1.2 However, Derby has not previously attracted residential developers to provide housing within the City centre – however it is considered that the City centre will provide a highly attractive proposition to developers and occupiers within the current market and there is evidence that this is now being recognised. 1.3 Key factors which support the Derby City Living Initiative are summarised as follows; i) As noted above, recent investment within the City centre has transformed the area to create an attractive place to live. ii) There are a range of sites and buildings which are capable of early development and conversion to residential uses – including a wide range of office properties which are beyond their economic life for re-use as offices and capable of conversion to residential uses. iii) The Derby economy has seen the growth of Advanced Manufacturing sector and is now recognised as a major hub for this important sector within the UK. This has created a high wage economy and attracted large numbers of graduates and young professionals into the City to meet the growth of major employers. These represent key areas of demand for City Living. iv) The growth of University of Derby around the City centre and the demand from post graduates to remain within the City is identified as a further key area of demand. The University of Derby currently offers over 300 courses for around 22,000 students with specialisms within business, computing and mathematics. The main campus is situated at Kedleston Road. v) The Core Strategy has identified a requirement for 1,700 new dwellings within the City centre by 2026 and recent changes in planning regulations has supported a permitted change of use from office to residential uses. This provides the early opportunity to bring forward some of the stock of outdated offices for residential uses without the costs and delays of the planning process. There is already evidence of increasing developer demand for office properties for conversion to residential uses in other Cities within the UK – and consider that Derby demonstrates all of the criteria to support such investment. There is already evidence of some evidence of demand to support such uses. vi) Derby City Council (DCC) recognise the challenges associated with creating a new market for City Living in Derby. Accordingly, DCC have established a new £6.5 million City Living Loan Fund to support developers in the provision of loan finance to bring forward schemes subject to specific investment criteria being met. Thomas Lister Limited – TL826b Page | 2 vii) DCC recognise that the initiatives will require for the Local Authority to carefully consider their approach to Planning in order to encourage new markets such as the Private Rented Sector. The Council’s bid to DCLG to establish a ‘Derby City Centre Housing Zone’ is a demonstration of commitment to promoting City Living. 1.4 The City Living Prospectus sets out additional information in relation to each of the criteria summarised above and seeks to establish an evidence base to support the business case for City Living within Derby. 2.0 Derby Overview 2.1 Derby is the UK’s most central city and easily accessible from the whole of the UK. Derby is at the heart of the road and rail network. Many major cities can be accessed from Derby by direct rail link, including London, Leeds, Edinburgh, Birmingham, Bristol, Cardiff, Southampton, Reading and Newcastle. There are also convenient and direct sub regional links to Nottingham, Leicester, Matlock, Lincoln and Sheffield. The City is only 89 minutes from London St. Pancras with 35 direct services daily. Derby Railway Station has recently undergone a £30m refurbishment and the Midland Main Line will be electrified by 2019, making journey times to and from Derby quicker. 2.2 Derby is well served by the highway and motorway network. Good cross regional A Road connections include A38, A50 and A52. The City centre is only a 10 min drive from the M1 and a 30 min drive from the M6 (A2013). 2.3 Derby has a new inner ring road which has vastly improved the speed of movement around the city for private and public transport users. A new £20m bus station has created a modern, safe environment for passenger transport users. East Midlands Airport is 20 minutes from Derby City centre, serving over 4m passengers per year. 2.4 As a high-tech city, Derby has a well-established superfast broadband infrastructure. The City’s broadband connection speeds perform well against other UK cities averaging 14.4mbit/s, 1.7mbt/s faster than the UK average. In terms of superfast broadband availability 93.8% of residential and non-residential premises in Derby can be reached, a higher availability rate than London (OFCOM 2012). 2.5 Derby has a great cultural offer, Derby Quad is a £11.2m arts and media centre. The City boasts two theatres, the region’s largest dance centre Deda, three free museums and three multiplex cinemas. The City is also within one hours drive of 100 attractions, which include top UK attractions, the Peak District, Alton Towers and Chatsworth House. 2.6 The City is building on its strong sporting heritage with a £50m leisure strategy which includes the construction of the Derby Arena multi-sports, events and cycling venue and an Olympic-size swimming pool alongside the Riverlights complex. 2.7 Derby has established itself as a brilliant place to shop, helped by the £340m Westfield Shopping Centre. This is the regions largest shopping centre (housing 200 stores and multiplex cinema) and attracting 25m visitors per year. This has been complimented by the Riverlights complex, home to two hotels, five restaurants and a Thomas Lister Limited – TL826b Page | 3 Casino. The Cathedral Quarter and St. Peters Quarter, in turn, offer a unique, boutique shopping experience. 3.0 Overview of Derby Residential Market 3.1 A review is undertaken as to key trends within the Derby residential market over the past 8 years as follows; Numbers of Transactions 3.2 From the graph below it can be seen that the number of annual property sales in the Derby City area fell significantly in the wake of the financial crisis at the end of 2007 and throughout 2008. The number of annual sales dropped from 5,440 at the peak of the market in 2006 to 2,633 in 2009. After a small resurgence in sales in 2010 and 2011, the number of transactions decreased in 2012 and to their lowest level in 2013 with 2,507 sales. Figure 3.2 Number of Residential Property Transactions in Derby 2005-2013 Average Residential Sales Value Prices 3.3 From the graph and the table below it can be seen that average annual house prices decreased by approximately 6.4% in the years following the financial crisis (2008-9). After a bounce back in 2010, prices have seen significant growth since 2012. Figure 3.3 Average Annual Residential Property Price Change 2005-2013 Thomas Lister Limited – TL826b Page | 4 Graph 3.3 Annual Average & Median Residential Property Prices, 2005-2013 3.4 It can be seen from the table below that average house prices in the Derby City area have been reasonably volatile over the first half of 2014. Much of this can be attributed to seasonal fluctuations in the property market. Looking at the first quarter of the year, compared with the first quarter of 2013 (January – March) average property prices decreased by 1% from £145,850 to £144,420. The number of transactions, however, rose by 45% from 570 to 825. 3.5 Average residential sales prices for the first 6 months of 2014 are set out as follows; Table 3.5 Average Monthly Residential Property Prices 3.6 A further overview as to the status of the Derby residential market is contained within the Derby HMA Strategic Housing Market Assessment Update which was completed in July 2013. The report covered Amber Valley, South Derbyshire as well as Derby City in the assessment of housing need for the period up to 2028. 3.7 The assessment identified a requirement for an estimated 16,165 new dwellings within Derby for the period of 2008 – 2028 and therefore represents an average 806 dwellings per annum over the 20 year period. The assessment particularly highlighted the requirement for additional 2 bedroom (22%) and 3 bedroom (56%) within the requirement for new market housing within Derby. 3.8 Existing housing stock across Derby by tenure is summarised within the assessment as follows; Thomas Lister Limited – TL826b Page | 5 Local Housing Other Total Private Total Authority Association Public Public Sector Dwellings Sector Sector Derby 13,802 7,259 50 21,111 84,130 105,240 13.1% 6.9% 0.0% 20.1% 79.9% 100.0% East 9.5% 6.5% 0.2% 16.2% 83.8% 100.0% Midlands England 7.6% 10.2% 0.3% 18.0% 82.0% 100.0% 3.9 The profile indicates a high proportion of public sector and in particular Local Authority owned housing stock.
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