A regional breakdown of construction activity in four of Britain’s largest cities outside of London has revealed that building is booming across the country. Despite uncertainty from Brexit and a downturn in the sector in 2018, Leeds, Birmingham, Manchester and Belfast showed sustained or increased activity across all construction subsectors.
With an on-going housing crisis making the property Sector in the UK unaffordable for many, homeownership among 25-33 year-olds has halved in the past 20 years, and as a result Britain could be on the verge of a housing market collapse at an incredibly vulnerable economic moment for the nation. At the same time, the British Construction sector endured a tumultuous period in light of Brexit pressures, and an economy plagued by sluggish productivity.
At the same time, the continued concentration of populations into urban areas means that one in six of the homes needed in the UK’s top biggest cities have not been built yet. In order to meet this demand of creating 10,500 new homes every month across Belfast, Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, London, Manchester, Newcastle, Nottingham and Sheffield in the next 20 years, Mace recently predicted that construction firms would need to improve productivity by 30% to meet this demand. It also suggested doing so could unlock £53 billion in economic output.
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As the country braces for Brexit, a new report from Deloitte has found that the construction sector has made major strides in the right direction, however. Construction activity in four regional cities in Britain is at a record high, including a flurry of building projects in Manchester, despite uncertainty about Brexit, the Big Four firm found. According to the Real Estate Crane Survey, which covers Leeds, Birmingham, Manchester and Belfast, there has been sustained or increased activity across sectors including offices, hotels, retail, education and student housing.
Manchester had 78 sites under construction – including 44 new starts – more than the US cities of Seattle, Los Angeles and Chicago as measured by Deloitte's North American Crane Index. The residential sector was the most active in the city, with 48 of the projects relating to new homes, and a further three developing student residential space. According to Deloitte, this demonstrates a marked change for the sector, with residential units under construction having enjoyed a pre-recession peak of 3,965 in 2007. In the 2019 survey, that figure stands at 14,480.
Leeds meanwhile broke multiple construction records in 2018, as the city built for the future, with new highs achieved in the Health and Education and Purpose-Built Student Accommodation sectors. Leeds saw 2,232 residential units constructed in its 2019 data, a much smaller level, than Manchester, but has seen its office space construction significantly increase by around 30,000 square feet in the last year.
Yet again, elsewhere, Birmingham saw record-levels of construction. The UK’s second city enjoyed both high developer and investor confidence, as preparations for HS2 get underway and the 2022 Commonwealth Games draw ever closer. Birmingham also saw city centre residential development reach an all-time high with over 5,000 units under construction. Belfast, meanwhile, saw its highest level of construction growth in the hotel sector. In 2016, only 98 hotel beds were completed in the whole year; in 2018, 1,249 new guest spaces were built.
Commenting on the findings, Deloitte Real Estate partner and regional head Simon Bedford said, "To have construction figures this healthy is somewhat of a surprise given a myriad of market uncertainties. Developer confidence is a key indicator for economic health and to have this many significant construction starts over the last 12 months, especially in speculative office schemes, is testament to the resilience of the regions and appetite for growth.”
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Source: https://www.consultancy.uk/news/20477/construction-booms-across-four-uk-regions-beyond-london
