Government regeneration to boost UK’s housing market by £188 billion
Research by property developer, Stripe Property Group, reveals that planned regeneration projects across the UK will increase the value of the national housing market by an estimated £188 billion.
The UK housing market has benefited from booming house prices in recent times, increasing by more than 6% in the past year alone.
Moving forward, continuing price rises are less predictable due to external market factors, but there are 38 areas of the UK that the government has earmarked for significant regeneration, which means house prices in these areas are destined to enjoy an additional lift in the near future.
In fact, previous research from CBRE states that regeneration results in an average local house price rise of 3.6%.
Across the 38 selected investment zones, the average house price is currently £244,323. A 3.6% increase will push this up to £253,119 – an increase of £8,796.
The biggest house price boost will be seen in and around the Greater London Authority regeneration zone where a 3.6% increase will add £19,567 to the average house price.
In the investment zone of Central Bedfordshire Council, regeneration is expected to add £13,842 to the average local property price, bringing it to a new high of £398,342; while for Essex County Council, regeneration will increase house prices by £13,635.
The value added to individual house prices is clear with even the most affordable investment zone, Blackpool Council, enjoying price rises of £4,924, but what does regeneration mean for the overall value of the property markets across all 38 local investment zones?
Across all 38 areas, there are 16.3 million homes. With an average house price of £253,119, this creates a total market value of £5.2 trillion. If planned regeneration does bring about a boost of 3.6%, total market value will grow by £188 billion to a new total of £5.4 trillion.
Once again, Greater London Authority, with its 3.7 million homes, will see the biggest boost to overall market value, increasing by £71.8 billion to create a new total value of just over £2 trillion.
For Greater Manchester Combined Authority, regeneration will add £10.2 billion to the value of the housing market, and for West Midlands Combined Authority, the increase will be £9.9 billion.
Elsewhere, Kent County Council can expect a market value increase of £9 billion, and Essex County Council will see the housing market boom by £8.9 billion.
In Blackpool, where the total market value increase is expected to be lowest, there will still be a boost of £384 million.
Managing Director of Stripe Property Group, James Forrester, commented: “Such an extensive level of regeneration is great news for those areas due to benefit.
There are large chunks of the UK that have long been neglected when it comes to central funding so it’s great to see such a large number of promised investment zones.
If the regeneration projects are well targeted, they will bring new potential to some much forgotten corners of the country which, in turn, will breed opportunity and prosperity in each local area.
“If, however, the government does not target its regeneration efforts properly, there is a risk that yet more money will be poured into the wrong places, with the resulting house price increases only creating greater inequality within the market.”