Prestigious new-build developments are attracting prime buyers, helping to put up-and-coming areas on the map and lifting property prices, according to Investec’s UK prime property hotspots report. The trend is transforming the property market – and not just in London.
In 2017, new builds represented £5bn of total prime sales (or 16% of the total market) in England and Wales, delivering a third of the year-on-year growth in the prime market – an extra £602m.
What’s behind the growing importance of these properties? And where are the current and future hotspots?
Buyers are seeking value…
The slowdown in the prime London market over the past two years has led to investors and homebuyers alike looking beyond traditional well-heeled areas like Kensington & Chelsea, Mayfair, Belgravia and Knightsbridge.
In traditional prime locations, developers can struggle to find greenfield or brownfield sites to build properties with the features and contemporary designs many high net worth (HNW) homeowners desire. But when new transport links, regeneration schemes, changing demographics or emerging business opportunities boost the appeal of a less-than-prime location, then luxury new builds can flourish, and often at good value.
Central London will always be important for prime buyers, but the best-value new builds could be in an up-and-coming area. Indeed, the new-build story is increasingly interesting outside of the capital as emerging prime hotspots combine with more available land and an evolving infrastructure to offer real value.
…And new features and amenities
“New build often has a halo effect,” says Peter Izard, Investec’s business development manager. “Beautiful, high-spec developments are inherently attractive, and usually come alongside infrastructure improvements and employment opportunities that draw ever-more people in.”
And while the research shows buyers at the upper end of the market prize good transport links, they also value size, unique features and outdoor spaces.
Major regeneration projects are the ultimate expression of this virtuous circle. They often feature a combination of high-profile new builds, restaurants, shops and office space; new transport links; and new civic amenities – such as schools and libraries. Crucially, they often tend to be in neglected but attractive locations close to a city centre.
Izard adds that “connectivity is now a big factor – having access to fast broadband is increasingly a must-have. Changing working patterns and a desire for work-life balance mean space for a home office is also high on the list.”
Prime new-build properties are typically designed to deliver the space, modern lifestyles and all the technological elements that HNW individuals might expect.
Location, location, location
Our research also identifies regions, boroughs, cities and towns that have seen growth in prime sales – in many cases a consequence of new-build development.
In Greater Manchester, prime sales were up 22% in 2017, to £229m. In South Bucks, new builds made up 20% of prime property sales that year, with the percentage rising to 41% in Broxbourne as buyers eye its Crossrail 2 terminus, due in 2033.
Here are three more examples where the new-build trend has come to life:
This diverse London borough is no stranger to upmarket property sales: 258 prime deals totalled £344m in 2017, and 60% of prime sales were new builds.
But there are still plans for developments around Brick Lane and Petticoat Lane, along with a £100m redevelopment plan to turn the Old Royal London Hospital into a new civic centre by 2021/22. All three locations are within walking distance of The City and Liverpool Street, a key transport hub.
Just a couple of miles away is a £350m redevelopment scheme at Ailsa Wharf, with the whole Poplar riverside area ripe for regeneration.
The research shows 24% of prime property sales in 2017 were new builds – that includes 35 properties in Cambridge, worth £45m. The city’s strong transport links – bolstered last year by the opening of Cambridge North station – combined with its booming tech industry and latent demand from the upper echelons of the university have kept the property market buoyant.
Smaller luxury developments are springing up around Addenbrookes Road, helping to meet growing demand as hubs such as the Cambridge Science Park draw in more high-tech employers.
Plans are also underway for five new garden towns between Cambridge and Oxford.
Tyne & Wear
Ranked by The Sunday Times as one of the best places to live in the UK, Tyne & Wear’s Tynemouth boosted the area’s prime property market, which grew by 15% last year. Of this growth, 20% was due to new-build sales. This summer, plans were unveiled for a new ‘urban village’ on the banks of the Tyne that includes up to 1,500 new homes, a hotel, bars, restaurants and green spaces.
High-end residential new builds in Tyne & Wear tend to come to market at exceptional value. Bespoke developments around Newcastle, Gateshead and Whitley Bay will typically be below the £500,000 mark, despite high specs and generous living space.
Ryan Herman is a journalist who writes about business, entrepreneurship and sport for publications such as Director and Vice Sports.