UK region

Which UK region is most underserved by property developers?



The property industry is split over which area of the country is most underserved by property developers.

In a recent poll conducted by Development Finance Today, 29% of voters chose the East of England and the West of England as the most underserved area of the UK, while 28% selected the North of England and 14% opted for Wales.

Poll

Rico Wojtulewicz, policy adviser for the Home Builders Association, felt that many areas were not underserved, but inappropriately planned by local authorities.

“The planning system continues to stifle local developer capacity and this has impacted supply in areas with many rural communities, such as the South West and the North.

“Supply can be immediately improved by identifying many more infill and small sites in local plans, making sure frameworks are suitable for SMEs and encouraging a diverse mix of developer and development.”

Sam Howard, COO of Regentsmead, felt there were a number of factors as to why some areas of the UK had been underserved by developers.

“…A key factor is that the larger housebuilders tend to build in more affluent areas as their profit [there] is larger than building affordable homes.

“This does tend to mean that areas such as [the] North East and Wales do tend to be ignored, whereas [the] South East, London and [the] Midlands get the bulk of the focus.”

Bristol
Are Bristol and the West of England underserved by property developers?

“I still believe London and south-east England remain the most underserved markets, proportionally, based on the chronic undersupply of housing,” said Michael Dean, principal at Avamore Capital.

“This would be closely followed by Bristol and the East of England.”

Steve Smith, business development manager south at Roma Finance, added: "There are several underserved areas and we see this applying to the very south-west corner of England and the east and north of Wales.”

How can building be encouraged in these areas?

James Bloom, managing director of development finance at Masthaven, felt there would always be more development in the South and the Midlands due to stronger demand, but felt demand could be increased in other areas.

“…Planning can be a major constraint in some areas and central and local government could look at their policies to ensure they are encouraging regional regeneration.

“Development is largely driven by demand, so major cities and towns will always attract a higher proportion of new schemes.

“There needs to be incentives or grants in place to ensure more redevelopment occurs in the current underserved areas.”

Planning rules
The relaxing of planning rules could encourage more regional development

Michael, like James, wanted to see a relaxation of the planning system to encourage development in these areas.

“Relaxation of the planning system on brownfield sites, releasing some green belt land for development and the government providing greater support for SME housebuilders.

“The dominance of the volume housebuilders on public sector land needs to end because this will reduce land banking and lead to faster delivery of units.”

Meanwhile, Steve wanted to see more incentives, adding: "As to how more development can be encouraged in these regions, I think there will have to be incentives to encourage development projects, but any scheme needs to be viable so it's essential that profitable developments can be made in these areas.

“…We're seeing a lot of development activity in south Wales and across the M4 corridor which has been buoyant for a number of years.

“Obviously, London is a property market of its own and remains very active.

“[The] emerging regions are definitely Manchester and Bristol, where we're seeing a lot more development."

Manchester
Manchester is an area which is becoming more popular with property developers

Sam added that lenders needed to provide developers with finance to build houses in the right places.

“This can be in south Wales, [the] West of England or East Anglia.

“Currently we are funding a large number of projects in East Anglia, where our loan book has grown exponentially as the demand for quality housing from a growing demographic is rapidly rising.

“We will continue to provide flexible and fast funding to enable SME developers to meet this housing shortage.”


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