Employment & Population Growth

Looking ahead, employment levels, which fell during the economic downturn, are set to grow at a steady if low pace as the population increases. The population of Norwich rose by 8% to 132,500 between 2001 and 2011 and is set to grow 18% to 148,600 by 2026. Overall, the Greater Norwich area has a larger proportion of working age population and a smaller proportion of retired people than Norfolk as a whole.

Developer Activity

Housebuilders are responding to the demand for more homes by increasing supply and bringing forward sites that have become financially viable as a result of an improving market. There is now a cluster of new sites with planning approval around Norwich, three of which will have 1,000 units or more.

Local Authority data reveals that housing completions in the Greater Norwich Development Partnership (GNDP) area have been running consistently below target since the Joint Core Strategy was set in 2008.

In 2011-12 housing completions were still 44% below target although total completions were marginally higher than in the previous year. Although low building levels reflect the difficulties developers faced throughout the financial crisis, the improving economy has reversed the trend. GNDP figures project 1,099 net housing completions across Norwich, South Norfolk and Broadland in 2013-14, peaking at 1,706 in 2014-15.

In the shorter term, the introduction of the Community Infrastructure Levy (CIL) in July 2013 prompted a spike in planning consents over the summer as developers sought to push through applications before the new tax came into play.

It is too soon to judge whether or not CIL will have any noticeable effect on land values or the market. However, following engagement from Savills on behalf of the building industry during the consultation process, the CIL rate was reduced to £75/m² from the initial proposed rate of £160/m². We believe that this reduction will allow the market to continue down the path to growth.

The market in 2014

■ Over the next five years we expect house price growth in the East and South East of England to outpace London.

■ We revised our house price forecasts following the introduction of Help to Buy. Property values in the East are expected to grow by 30.7% by the end of 2018. We expect to see most of that growth over the next couple of years. But given the market could slow from 2016 when interest rates are expected to rise and Government incentives are wound down.

■ Following a shortage of new homes, the recent increase in planning consents will result in a much needed increase of supply in the medium term. Expected population growth and strong student numbers will underpin demand.

Taken from
Spotlight: Norwich Residential Development Sales