The cost of property in the South West is expected to grow by 25 per cent over the next five years, according to leading property advisers CBRE.
The firm has published detailed research into the housing sector in its Regional Land Report, which is produced every quarter. While CBRE says there are real signs the economic recovery has eased slightly since the turn of the year, it is still predicting healthy growth in the South West.
According to the findings, London and the South East will continue to lead the way in terms of the cost of property but the South West will remain one of the healthiest markets in the UK.
Philip Morton, Head of Agency & Development at the Bristol office of CBRE, commented: “Nationally the property market has stalled slightly since the start of the year, but that does not appear to have been the case in the South West. We have seen a significant improvement throughout 2014 and Q1 2015 as sales values have risen sharply.
“City centre stock now achieves over £400 per sq ft in some prime city locations in a move driven by downsizers and investors, supplemented by first time buyers. As a result of this strong market, confidence has grown and house builders have begun to secure off-market sites. City centre schemes have seen a resurgence and competition between private rental schemes and open market sales is high on prime sites.”
CBRE says improvement is set to continue at its current pace unless major reforms are brought in at the next election to force developers to build more houses. The firm believes the main limitation on the South West market is the lack of stock, with student accommodation, hotel use and private rental schemes limiting the volume of developments in the pipeline.
Guy Mansfield, Head of South West Residential Development at CBRE, said: “A strong economic backdrop has provided favourable conditions for the housing market. Low levels of unemployment and a twelve-year high in consumer confidence have contributed to a strengthened UK economy. Despite a plateau in recent activity, a post-election spring bounce back is anticipated in a move towards more sustainable growth across the residential market.”
Pictured above: Philip Morton, Head of Agency & Development at the Bristol office of CBRE