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  • savills.co.uk/research 01

    Spotlight Ipswich & Suffolk Coastal Residential Development Sales 2015

    Savills World Research UK Development

    SUMMARY A positive outlook for both urban and rural markets

    ■ Outperformance and underperformance: House prices in the East of England have recovered strongly since the downturn and are now 7.5% above their previous market peak. The strong Suffolk Coastal market has performed in line with the region, whereas prices in Ipswich have only just surpassed their 2007/8 peak.

    ■ Top of the league: Some of the most expensive seaside real estate in the UK is found along the Suffolk coast, buoyed by strong demand for family housing and second homes.

    ■ Seaside appeal: Alongside demand from families and second home owners, many downsizers have been attracted to the Suffolk coastal area by the quality of life offered close to the sea.

    ■ Development potential: In urban locations such as Ipswich, flats for singles, couples and the student market dominate, but there is a gap in this market for family housing. “Some of the most expensive

    seaside real estate in the UK is found along the Suffolk coast”

    ■ Market variety: House prices in this area of Suffolk range from £100,000 for a small studio flat in Ipswich town centre to over £1m for a large family house and grounds on the coast.

  • 02

    Spotlight | Ipswich & Suffolk Coastal Residential Development Sales

    A MARkeT Of TWO hAlveS

    Across the county of Suffolk the market for new build property is now looking very positive, but the urban and rural sub-markets for new homes have experienced a very different recovery. House prices in the Suffolk

    coastal market have performed strongly and are now 7.5% above their previous peak. The wider Suffolk market lags behind the Eastern region and England & Wales. Prices in Ipswich surpassed their previous market peak for the first time in March 2015.

    Suffolk Coast The Suffolk Coastal area contains some of the most expensive seaside

    towns in England & Wales, including Aldeburgh where average house prices in Q1 2015 were £413,000 and Southwold where a beach hut was recently put on the market for £100,000. Towns and villages in this area have experienced a strong recovery in house prices since the credit crunch with the number of £1m+ transactions in the Suffolk Coastal local authority increasing by 125% between 2006/07 and 2013/14.

    The quality of life offered close to the sea, the proximity of surrounding countryside and the low rainfall experienced by East Anglia have attracted many families and retirees to live in the area or to purchase second homes.

    The most desirable detached new build family houses in these villages can command values of over £300psf. Small niche developments have been popular with buyers and in some cases command a premium over equivalent second hand properties. Ogilvie Hall in Thorpeness, a notable local landmark, has been converted into five family homes and has achieved values of around £340psf according to Savills data. This is compared to values in the second hand market which average around £270psf according to Hometrack.

    Developments in premium locations are even achieving off-plan sales. For example, the Whisstocks Boatyard development on Woodbridge waterfront, due for release off plan later in 2015, is already attracting vast amounts of attention.

    Downsizers have been attracted to new build housing in the area and the prospect of lower maintenance and running costs, along with the peace of mind that comes from new, high-spec appliances and a

    FIGURE 2

    house prices versus peak

    Source: Savills using HM Land Registry (12 month smoothed)

    FIGURE 1

    Average new build sold price, year to March 2015

    Source: HM Land Registry

    House prices in the Suffolk coastal market

    have performed strongly and are 7.5% above peak

    £500,000

    £450,000

    £400,000

    £350,000

    £300,000

    £250,000

    £200,000

    £150,000

    £100,000

    £50,000

    £0 Detached Semi-Detached Terraced Flat

    ■ Ipswich ■ Suffolk Coastal ■ Suffolk ■ East of England ■ England & Wales

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    ■ Ipswich ■ Suffolk Coastal ■ Suffolk ■ East of England ■ England & Wales

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  • 2015

    savills.co.uk/research 03

    builder guarantee. An example of this type of development is Malt Yard in Woodbridge, a development consisting of 29 1 and 2 bedroom assisted living apartments.

    Ipswich In contrast, larger urban areas, including the county town of Ipswich itself, have experienced a more subdued recovery, but values are now returning and pent up demand is seeking an outlet.

    Ipswich is more affordable than nearby towns such as Bury St Edmunds and Colchester. The average new build sale price last year was £237,000 according to Land Registry. In addition, as affordability has become squeezed in London, Ipswich is looking like an increasingly attractive commutable satellite town. Fast trains to Ipswich from London Liverpool Street arrive within 59 minutes. Ongoing regeneration of the town centre is encouraging economic migration to the area.

    The waterfront quarter of Ipswich is the largest single regeneration project in the East of England. The extensive mixed use development project, which has now been underway for a number of years, has turned a former industrial dock into an emerging residential and commercial centre.

    Meanwhile, demand for new build homes across Suffolk has improved significantly. The delivery of new schemes had stalled, but now with a strong pipeline of stock coming to the market we are seeing a good level of interest from purchasers. Landmark developments including The Mill, the tallest building in East Anglia at a total 23 storeys, and Regatta Quay, which are now nearing completion, signal to the market that the recovery has spread to this area.

    Flats are the dominant new build type in Ipswich, catering for singles, couples and the student market. Prices for apartments in 2014 reached £200psf. The student population is helping to reinvigorate the area. Waterfront Ipswich is the location of University Campus Suffolk, Suffolk's first higher education institution, which has become a popular university destination within the county since it was established in 2007. Student accommodation for some of the circa

    FIGURE 3

    Suffolk new homes development pipeline

    Source: Savills, HM Land Registry

    keY

    future Developments Status ■ Under-construction ■ Permission ■ Application ■ Pre-planning

    Total Residential units

    1,000 to 2,500 750 to 1,000 500 to 750 250 to 500 100 to 250 0 to 100

    Average transaction value 12 months to Mar-15 ■ Over £400,000 ■ £350,000 to £400,000 ■ £300,000 to £350,000 ■ £250,000 to £300,000 ■ £200,000 to £250,000

    ■ £150,000 to £200,000 ■ Less than £150,000

    4,000 students enrolled there is just 300 metres from the water.

    However, there is a gap in the market for the provision of family housing. The current housing target within Ipswich Local Authority is for the delivery of 14,000 new homes between 2001 and 2021, an average of 1,400 new houses per annum. In the last two years delivery of housing has been at the lowest level since 1998, with only 100 homes completed in 2012/13 and only 170 completed in 2013/14. Delivery has increased in the past year but there is still significant opportunity for more developments to come forward.

    Development pipeline Aside from the Waterfront Quarter in Ipswich there is very little in the wider area which is currently under construction as shown in Figure 3. There are a number of large sites in the planning pipeline, but there is capacity

    in the area for a larger volume of development sites to come forward. Smaller sites of up to 10 dwellings are more prevalent in the area, particularly in desirable coastal towns and villages, but these alone will not fill the gap between supply and demand that has built up due to the reduced number of transactions following the recession.

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