Dave Taberner, Associate Director of Property Finance at OakNorth
The UK’s residential sector continues to evolve and respond to demographic shifts, economic trends, and societal needs, with the North West market being no different. Over the past 18 months, it has demonstrated remarkable resilience, and we’re now delighted and encouraged to see its general outlook improving, driven by various macro factors, such as growing consumer confidence, falling inflation, and more attractive mortgage products.
Furthermore, pressures impacting both the cost and supply of labour and materials continue to ease, with recent research[1] revealing less than one in five developers cite these as major constraints on housebuilding. This has resulted in a return in housebuilder confidence, to go along with a return in consumer confidence mentioned above.
The growing positive sentiment shared by builder and consumer alike is leading to a resi resurgence across the region, with average property prices rising year-on-year across the North West and in areas such as Cheshire West and Chester, by as much as 5%[2].
This comes as no surprise given what the area has to offer. Following years of regeneration, Manchester is now seen by many as the UK’s second city, becoming a much sought after destination to work and live, after London. Greater Manchester and its popular surrounding areas have a strong and flourishing economy, a thriving jobs market, as well as a growing art, culture and hospitality scene. Billions have also been spent improving the region’s transport infrastructure. Its rail network, for example, is now particularly impressive, with multiple services connecting the North West’s major economic centres of Manchester, Liverpool, Warrington and Preston. These cities and towns are also supplemented by some of the UK’s best and most famous countryside, with the region being home to the Lake and Peak Districts, Ribble Valley and Cheshire Plains.
Despite these attractions of living in the region, it has been widely reported over recent times that the UK needs c.300,000 new homes built every year to keep up with demand, including in the North West, and unfortunately, we’ve fallen short to date. That’s why it makes for encouraging reading that the new government aims to build 1.5 million more homes in the next five years, helped by planning reforms, the release of green belt land and the reintroduction of mandatory housing targets for local authorities.
However, in order to hit these targets, SME housebuilders and larger developers need to be better supported. At OakNorth, we’re doing everything we can to support these groups to ensure they get access to the debt finance they need to continue bringing new homes to market. We’ve been fortunate to finance the development of major city centre residential projects, as well as large rural developments. One such examples is our recent £18m loan to leading Manchester-based property business, Hurstwood Holdings, to develop 75 new homes across three separate residential schemes in Rossendale and Cotton Meadows in Lancashire and Tarporley, Cheshire.
Moving forward, supporting the resurgence of the North West’s residential market will be an integral part of OakNorth’s growth strategy, and we look forward to working with many more of the region’s innovative and leading housebuilders in the future.
[1] Savills – English Housing Supply Update Q2 2024
[2] ONS – Housing prices in Cheshire West and Chester
