Construction activity shows signs of strength across regional UK cities

Construction activity is showing signs of strength across major UK cities, at least when discounting for the decline in London.

Deloitte's regional Real Estate Crane Survey tracked construction activity in Belfast, Birmingham, Leeds and Manchester, and found each city had either seen a stable or increased level of property development over 2017.

When accounting for a range of sectors including offices, hotels, retail, education and student housing, residential development was the standout performer.

Simon Bedford, partner and regional head at Deloitte Real Estate, said: "The surveyed cities have shown a marked increase in housing development, in some cases doubling activity from the previous year.

Manchester construction
Manchester construction

"Our UK crane survey data shows a collective total of nearly 17,000 residential units currently under construction in these cities, ensuring housing targets are being taken seriously and developers are striving to meet demand."

That is in addition to progress in the office sector, with Birmingham set to surpass 1 million square feet for the second straight year, Manchester seeing five new developments adding a further 1.5 million square feet, Leeds experiencing three new office starts, and Belfast adding 453,000 new square feet under construction - up 24%.

That contrasts with London, which Deloitte said late last year was suffering from a decline as Brexit uncertainties and higher construction costs held back office developments.

Commenting on the regional activity, Mr Bedford said: "Across all the cities, the office sector is benefiting from serious investment as all locations sustained or significantly increased construction.

"Leeds saw a 67% increase in new schemes starting development from the previous year and similarly Belfast's office construction is up a quarter on 2016."

In total, Deloitte counted 24 new construction starts breaking ground in Birmingham in 2017, with 13 new residential development schemes set to deliver 2,500 new units in 2018 alone.

That accounts for a 30% rise on the previous year, while student housing schemes were up 53% to deliver 1,782 new bed spaces.

Manchester's city centre logged 20 new residential schemes, pushing past levels last seen in 2008 for the second straight year, while developers were "not shy of building upwards" with six residential schemes to exceed 25 storeys once completed.

Leeds, meanwhile, saw the number of residential units under construction hit its highest level in a decade at 1,586 across five sites, while Belfast recorded nine new schemes with a total 25 schemes under construction.

Overall, Mr Beford said the crane survey reflected regional "growth and resurgence".

"The unparalleled scale and volume of development is backed by significant investor confidence, strong business communities and an influx of new talent," he said.

"The demand for property, particularly in the residential market, has never been more evident."

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