City locations with extensive regeneration and redevelopment underway are favourites among property investors, and new research shows the most active cities for new-build property creation.
With housebuilding in the UK remaining top of the agenda, clearing the planning backlog is expected to be a priority in the upcoming budget announcement. Measures have already been announced to boost housing numbers, such as changes to permitted development and enabling more conversions and brownfield building.
Some of the issues facing the housebuilding sector at the moment include the high cost of materials, a shortage of labour, and a backlog created in the aftermath of Covid. While building levels have picked up pace in some areas, they are still lagging behind in others, exacerbating the housing shortage in some areas.
However, a new study money.co.uk has looked in greater depth at the cities in the UK where the highest amount of new-build property has been built in the last 12 months. It also considers factors such as the number of planning applications decided, annual Google searches, and job listings, to create an overall score.
Top 10 for new-build property
The highest number of new-build property investment opportunities in terms of completed properties, according to the research, was in Edinburgh, where 482 new-builds were completed per 100,000 people. This was followed by Aberdeen with 466 per 100,000 people.
Next, Newcastle in Tyne in the north east of England saw 372 new homes delivered per 100,000 over the 12-month period, followed closely by Manchester in the north west, where 315 homes per 100,000 people were completed.
When comparing the difference between the number of planning applications decided and the number of new-builds completed, Manchester had the smallest gap, meaning that it is the city where the highest number of approved plans for new-build property developments are completed.
From sixth to 10th position on money.co.uk’s list were Swindon, with 278 new-builds completed per 100,000, followed by Cardiff (261), Leeds (251), Derby (245) and London (238).
When it came to the number of planning applications decided, though, London had one of the highest figures at 693, beaten only by Edinburgh at 747, but the city appeared to lag behind when it came to the completion of new-build property.
Investors opting for new-builds
The number of new-build opportunities across the UK’s major cities and towns should continue to accelerate if some of the government’s current plans come to fruition. There is speculation that the government announcement next week could include more incentives to invest in brand-new properties, to replace Help to Buy.
There already exist a number of advantages to investing in new-build property, though, which is why this research could be food for thought for investors deciding on a location undergoing a significant amount of redevelopment and a boost in its housing supply.
At the moment, mortgage rates are at the forefront of many buyers’ minds, although rates have been falling in recent months. A growing number of lenders are now adding “green” mortgages to their books, offering incentives for buyers who purchase energy efficient properties.
New-builds are some of the most energy efficient housing stock in the country, particularly as new building standards are put into place. Generally, green mortgages are available on properties with an energy performance certificate rating of A or B, and most new-build homes fall into this category.
Energy efficiency in itself is another advantage, whether you will be living in the property or renting it out. While it means a lower carbon footprint for whoever lives there, a well-insulated, energy-efficient home provides much needed and significant savings on energy bills.
Many investors choose to purchase their new-build property off-plan, meaning a discounted price compared with the final sale value of the home once it is complete. This can lead to a greater prospect of capital appreciation in the future, compared with the price that was paid.
If you’re interested in investing in a new-build property in one of the UK’s key cities or towns, get in touch with BuyAssociation today, or browse some of our current property investment opportunities.