Developers face brownfield shortage
A dearth of brownfield sites suitable for residential schemes in northern city centres is forcing developers into 'more peripheral areas', according to Knight Frank.
These less expensive homes have found favour with buyers aiming to keep gross yields above 5%. As a result, land prices in secondary locations have enjoyed the strongest price growth over the past year.
The firm's latest Northern Residential Review says this issue has led to continuing development of edge-of-city brownfield sites in cities such as Leeds and Sheffield.
By contrast, both Manchester and Liverpool have large-scale mixed-use schemes on brownfield development land under construction or in the pipeline.
Knight Frank said competitive bidding also characterised the Newcastle market, where £1m/acre (£2.47m/ha) is rising to £1.5m/acre (£3.7m/ha) in the final phases of the city's Quayside redevelopment.
The report said the strength of the land market has spread to Morpeth, Chester-le-Street and Durham. It added: 'The acquisition of sites shows the strengthening demand for private property development which, 18 months ago, would have only attracted social housing schemes.'
Knight Frank believes housing markets will benefit from 'science cities' in Manchester, Newcastle and York, providing 'stimulus to the residential property market'.
Source: Property Week
