Markets — What price the city?

The nature of housing supply across the core cities presents an array of challenges for policymakers. Affordability pressures, for example, differ significantly. The highest average values are in Bristol where 21% of working households are priced out of the market, compared to just 3% in Liverpool.

The ability of housing markets in the core cities to meet the needs of young renters is also an issue with 4.2 units of rental supply for each unit of potential demand in Bristol compared to a low of 1.7 in Liverpool.

An analysis of housing supply by tenure and bedroom count shows that family homes (3+ beds) in the affordable sector account for 21% of overall housing supply in Manchester, compared to just 3% in Nottingham. Only by monitoring an array of supply, demand and pricing characteristics for each city can effective policies be created for both regeneration and new development.

Newcastle

Newcastle’s private housing market remained flat over the last year, with turnover at a relatively conservative level and only modest growth in average house price. The market adjustment was perhaps inevitable: the average house price was racing ahead of the regional average, and still for 8.6% of working households not on housing benefit even the lowest house price remains out of reach.

Leeds

Leeds has the best value social rented accommodation of all the core cities, with a two-bedroom home costing £52.40 per week, less than half the £114 average for a private unit. The city’s housing market is showing fairly low turnover, at 6.66%, but prices have grown over the past year, albeit fairly modestly, and well surpass the regional average.

Bristol

This is a boom city, with high employment levels and the highest average house prices of all the core cities, with growth over the past year just exceeding 11%. But the downside of the healthy housing market is that house prices are out of the reach of many. More than 20% of working households not on housing benefit cannot afford the lowest priced private homes. Unsurprisingly, weekly rent levels are high too, with a two-bedroom home costing £160 in the private sector and £81 in the affordable sector.

Nottingham

Nottingham has embarked on its regeneration, but it has some way to go in its efforts. A year ago the city registered the lowest average house price of all the core cities, and since then prices have fallen by just under 1%. The number of private one- and two-bedroom homes far outweighs the stock of affordable three-bedroom units and the social rent level is highest of all the core cities, at an average of £81.70 per week.

Manchester

House prices are still below the regional average, but catching up fast; the city registered the biggest house price growth of all the core cities over the past year. Some have expressed fears that Manchester could be heading for an oversupply of one- and two-bedroom apartments in the city centre because of its ambitious regeneration plans, but the statistics show that the number of small private apartments is balanced by three-bedroom social rented homes.

Liverpool

This is a city that is on the up, but there are clearly still challenges to be tackled. The city has the lowest number of young people in employment (per private rented unit) of all the core cities. On the plus side, house prices have risen by a more than healthy 11.5% over the past year, although turnover is comparatively modest at 6.29%.

Sheffield

An average house price of £157,500 would put Sheffield in fourth place if the core cities were ranked on house price. On other indicators the city has a lot going for it: healthy house price growth and the second highest employment level for young people. Its private rented accommodation is also the most economical of all the core cities, at £103 per week for a two-bedroom unit.

Birmingham

City centre house prices lag behind the regional average, the lure of the surrounding areas still proving strong. House price growth in the city was conservative over the past year, at just under 6%, although private rental charges remain relatively high at £138 per week.