Mark Slade, Associate at Bruton Knowles Plymouth office, responds to questions on the current health of Devon’s residential and commercial property market.
1. What is the current health of Devon’s residential and commercial property market?
The residential and commercial market in Devon is looking healthy and growing - we’re seeing a lot of new houses being built, not only on the outskirts of Plymouth, but right down through the spine of Cornwall. New housing developments are appearing in Ivybridge, along the A38the new estate Sherford with 5,000 homes near Plymouth at Exeter with the new housing development at Cranford.
These new developments imply there is a significant amount of demand in the area. This could be down to a number of reasons – employment opportunities, consumers looking for a lifestyle change or enjoying the area as a holiday destination and then moving down full time.
For commercial, growth is being seen through an increase in online retailer and distribution centres. The cost of employment is cheaper here than in nearby areas such as Bristol or London, so there is an attraction for businesses to set up here.
2. What is the outlook for the region’s residential and commercial markets over the coming five to ten years?
The outlook for residential and commercial market for the next five years is purely a guessing game as there are so many things to consider, infrastructure, the economy in general, employment, who will be in Government and obviously dare I say it …’what will the effects of Brexit be?’ I certainly would not wish to crystal ball gaze beyond the next 12 to 24 months at the moment, what I can say is we as an office and as a firm, we are extremely busy across all sectors within our industry.
3. In terms of residential, what type of housing is the region most in need of?
The region is most in need of an increase in smaller, more affordable houses, to enable people to get onto the property ladder. Once on the ladder, second time buyers will then want to move on to buy 2 or 3 bed houses. This is common in areas with low economic wealth but high tourism levels – there is often a miss match between those that want to stay in the area and those that can afford the cost of buying or renting.
If we look at social housing, investment here is critical and key to sustaining villages and retaining employeelevels. Although the Universities in the area bring investment, we do also see a lot of ‘brain drain’, where students visit the area to secure their degree but then head elsewhere to start working. Keeping graduates in the area is vital but we need to supply affordable housing and employment for them, which then makes the area far more attractive in terms of living costs.
Overall, its affordable housing thatis critical to most sectors, to ensure the market place doesn’t stagnate but continues to blossom. People are also looking at housing that has a sustainable, low energy benefits.
4. In terms of commercial, what types of property is the regional market most in need of?
As we are seeing an increase in the number of national online retailers coming to the area one could argue that there is high demand for large warehouse space. This is true but there is no point in having substantial warehouses that are run by robots and employ minimal personnel. The economy of every country is and always will be built around manufacturing, something that the south west peninsula still relies upon heavily. Therefore warehouse and industrial space must remain high on the list of priorities.
The low employment pay rates and reduced logistics costs has made this location very attractive to these companies, and consequently developers are working hard to find space for them.
Warehouses are being built in a range of sizes, to allow the market to progress. Once a business becomes successful it needs space to expand, so although they may start out in a ‘garage’, it won’t be long before they are looking for a bigger space. With this concept in mind, future development and freeing up of land for employment use all over the South West is a must.
5. Where are the hotspots for commercial and residential development going to be over the next five years?
For the hotspots of growth, it would mostly be the main towns, so along the spine of Cornwall including Taunton, Exeter, Plymouth, mid-Cornwall. With Newquay airport expanding we are also witnessing high demand along the North Cornwall coast. Rural areas are going to need employment opportunities to keep villages from dying, so we may see some growth here too.