Leeds is the best location for building new homes, according to research from Argyll Property Partners, the mezzanine finance lender.
Argyll’s analysis of official figures shows the Yorkshire city offers the best combination of value, house price growth, planning success, and demand for homes.
New build homes in Leeds are worth 41% more than existing properties in the city on average. The value of new homes in the area are also increasing 13% year-on-year.
As one of the largest local authorities, there are almost four times as many property sales in Leeds, compared to the monthly average for England. The city’s planning authorities also approve 95% of major residential applications.
Top 10 local authorities for building new homes
|Region||Major residential planning applications granted||New build property price increase (YoY)||New build value compare to existing homes||Monthly Transactions compared to average for a local authority||Weighted Ranking|
|City of Bristol||91%||13%||12%||180%||7|
|East Riding of Yorkshire||87%||12%||41%||145%||9|
Brian Markovitz, Director of Argyll Property Partners, said, “Developers should head to Leeds if they’re looking to build homes in England. Property values for new builds in the city are seeing double-digit growth as increasing employment drives demand for homes.
“The significant gap in the price of new homes compared to existing properties means there are healthy profits to be made, while the high transaction figures suggest homes should be relatively easy to buy and sell. Leeds City Council is also one of the best for encouraging house building, approving almost all of the major applications it receives. Major new developments such as the Seacroft site in the east of the city suggest many are already discovering the opportunities Leeds has to offer for house builders.”
By contrast, Surrey Heath is the worst local authority for developers to build new homes. Surrey Heath in South-East England is the least attractive local authority to build new homes according to Argyll’s analysis.
The high property values in Surrey mean that developers will have to pay a premium price to secure a site, compared to other areas of the country.
Once complete, new homes in Surrey Heath are usual worth 23% less than existing properties in the area.
Homes in the rural area may also be harder to buy and sell, with monthly transactions in the area 50% lower than the nationwide average.
The local council approves 75% of major residential applications, but this proportion is still lower than the majority of other local authorities. However, the average value of new homes in Surrey Heath is still rising 7% year-on-year.
Worst 10 local authorities for building new homes
|Region||Major residential planning applications granted||New build property price increase (YoY)||New build value compare to existing homes||Monthly Transactions compared to average for a local authority||Weighted Ranking
(out of 324)
|Epsom and Ewell||38%||8.64||12%||-50%||322|
|Hammersmith and Fulham||80%||5.23||-2%||-17%||316|
Brian Markovitz, Director of Argyll Property Partners, said, “For developers, Surrey Heath doesn’t appear to be the best location for new builds. The higher land values in the area mean that profit margins will be squeezed. Despite Surrey Heath’s proximity to London, the large amount of Green Belt land in the area means home sales are also significantly lower than the average for a local authority.
“Renovating an existing home may yield better returns for anyone looking to invest in Surrey Heath. It’s also noticeable that two London boroughs feature close to the bottom as Stamp Duty, high land values and a decline in transactions combine to hamper Prime Central London’s attractiveness to developers.”
PICTURE CREDIT: andrew_roberts_UK