RESIDENTIAL
Market’s recovery has stalled but long-term outlook is more positive
The much-discussed and hoped-for sustained recovery in the residential development market at the end of 2024 has stalled during the first quarter of the year.
Residential developers remain cautious and continue to be hampered by project viability pressures, stubbornly high interest rates, inflation, regulatory changes and costs, planning pinch points, and the burdens of the Building Safety Act. Residential planning approvals across the UK over the last two quarters weakened significantly and it should take some time for the gap in the development pipeline to recover.
The long-term outlook is looking more positive with falling interest rates, National Planning Policy Framework reforms, government policy support, and institutional investors returning to the sector. There remains a chronic shortage of all housing tenures across all regions of the UK.
House price growth continues to show remarkable resilience during the first quarter of 2025, spurred on by buyers seeking to complete on mortgages before the stamp duty threshold changes. House prices are expected to remain positive with slow growth throughout the year.
During the first quarter, we have seen increased market activity in single-family and multi-family build-to-rent housing developments, co-living schemes, new build hotels, and off-campus purpose-built student accommodation. We expect strong interest in these asset classes to continue throughout the year.
Hampered by the lack of government funding, housing associations continue to limit their new build affordable housing programmes, as they focus on maintenance of their existing housing stock.
LEEDS, UK
Leeds Technology Campus Redevelopment
Metropolitan and District Securities has appointed RLB to provide project management and quantity surveying services for the redevelopment of the former Technology Campus of Leeds University.
The project will involve the demolition of the existing campus and the construction of three new residential blocks of studio and cluster apartments providing accommodation for more than 500 students.
The development will include a range of amenities and facilities to enhance the student experience, including a gym, yoga studio, cinema room, bike store, roof terrace, communal and events spaces, and retail unit.
The building utilises the district heating network from the local authority and includes plate heat exchangers to optimise energy efficiency. The project is targeting an Energy Performance Certificate ‘A’ rating and BREEAM ‘Excellent’ certification.
