Savills plc

03/04/2021 | Press release | Distributed by Public on 03/04/2021 04:04

Developers and planners urged to work together ‘to build the homes the market wants’

As well as revolutionising the way we live and work, 2020 also brought about changes to how we plan for new homes, with the number of homes planned for in Leeds and Bradford expected to rise because of changes in the way housing need is calculated.

As two of England's 20 largest cities, the number of homes Leeds and Bradford must deliver will be 35% higher. According to Savills Research, the requirement in Leeds will rise from 2,787 to 3,763 homes per year, whereas Bradford's will increase from 1,704 to 2,300 homes per year.

'Should housing delivery continue at current levels, Leeds will move from delivering homes above the government's minimum target to facing a substantial shortfall. For Bradford, where delivery already falls short of need, the goalposts have shifted even further out of reach,' says Adam Key, director and head of planning at Savills in Leeds.

The concentration of housing need in urban areas comes amidst growing demand from residents for more space, both in- and outdoors. For many, the experience of pandemic lockdowns through 2020 has highlighted the inadequacies of their current homes. That, alongside a stamp duty holiday, has triggered the most widespread rise in buyer demand for homes ever recorded, according to the RICS. Much of that demand has been directed at the suburbs.

In the latest residential client survey conducted by Savills it was reported that 62% of respondents are listing access to a garden or outdoor space as a higher priority than before Covid-19. That rises to 80% when just looking at the under 40s. Unsurprisingly given the experience of home schooling, over three quarters of those with pre-school or school aged children now place more importance on the amount of outside space available. The survey also reports 56% of respondents expect to work from home more often (rising to 81% for under 40s).

'The new homes we build will therefore need to be designed to support this increased emphasis on outdoor and green space, with adaptable rooms for flexible home working. Over two thirds, 69%, of homes built in Leeds in the year to June 2020 were flats, versus just 28% houses. To meet the rising resident demand for homes with more space, either Leeds must identify more sites to deliver houses, or developers will have to change the design of the flats they're building,' adds Key.

Planning changes look likely to concentrate housing delivery in high density flatted developments, while shifting demand points to a greater demand for more spacious homes in the suburbs. Planning changes will increase housing requirements in Leeds and Wakefield by 35%.

Analysing the age composition of household movers from Jan 2017 - Feb 2020 in and around Leeds Savills found that new build homes attract a higher proportion of younger households than second hand. This is true even away from the stereotypically 'young' university cities of Leeds and York. For example, in Calderdale almost two thirds of movers to new build properties were under the age of 40 (compared to less than half of movers to 2nd hand). Movers to new build homes were also more likely to have children than not (55%), with a high proportion of families moving to new build properties in Calderdale and Wakefield (70% and 60%, respectively).

In contrast, Harrogate had a lower than average proportion of movers to new build properties with children, and is also the most expensive area for new build properties at £317 per square foot.

The new Help to Buy value caps could intensify the affordability pressures keeping younger families from moving to higher value areas such as Harrogate. From April 2021 the value cap for Help to Buy will fall from £600,000 to £228,100 in Yorkshire & Humberside. Compare that to Harrogate, where the average Help to Buy property value in 2020 Q1 was £375,832. Housebuilders will therefore need to deliver more affordable homes, likely in the form of terraces rather than detached properties in order to satisfy these caps. They may have to operate outside of more desirable areas of Harrogate and York in favour of cheaper alternatives such as Calderdale and Wakefield to continue to cater to the Help to Buy market.

Matthew Jones, director and head of development at Savills in Leeds, believes retaining university students, as well as a collegiate relationship between developers and planners, can help drive the development market across Yorkshire.

'There are a number of examples of residential development sites in Leeds and other cities across Yorkshire that, despite having planning consent, have not progressed since the economic downturn. Developers and planners must work together to build the homes the market wants but, one of the challenges over the next 12-18 months is to improve investor confidence and underwrite deals in the city which, in turn, will give developers the confidence to move things along.

'While Channel 4 moving their headquarters to the city provides comfort, this needs to be built upon in order to generate interest from domestic and international investors. There is also the ongoing need to market the city better and make it more appealing to investors, which we all have a part to play in. Retaining university students to live and work either in or surrounding Yorkshire's Leeds will also help fuel demand for city centre apartments and the need for development,' says Jones.