STRONG economic growth around the M27 corridor is increasing the pressure for homes and workplaces, and failure to meet this demand may inhibit long-term growth, according to reearch by real estate advisor Savills.
The firm’s The Future of the M27 Corridor report found that the area’s economy is growing faster than the national average, driven by a flourishing tech sector and expansion of maritime industries, consumer spending and inward investment.
But it says that strong growth is exacerbating the housing shortfall and putting further strain on an undersupplied commercial market.
The six local authorities along the M27 corridor need at least 20,000 new homes over the next five years to meet current housing need.
Savills says that if new development continues at the current pace, the area will have a shortfall of 4,600 homes over the next five years, which could restrict further economic growth.
Colin Wilkins, head of Savills south coast development team, said: ‘It is vital that local authorities along the M27 corridor area work together to meet the housing demand created by a growing economy.
‘Planners, developers and house-builders must make sure that people are able to live and work in the same area and that new communities can evolve.
‘Well thought through transport solutions are essential to support additional housing in the area and ensure a sustainable outcome.’
The report found that a low level of housing supply had contributed to the increase in house prices. Over the year to September 2016, house prices have grown between eight per cent and 10.7 per cent in the area, above the national average of 7.1 per cent.
Office space in the western M27 area is also now undersupplied.
Martin Hastelow, head of office at Savills, said: ‘The M27 corridor has become under-supplied with office space, with a lack of new build and conversions to student housing and residential. With a lack of stock in the pipeline the opportunities offered by mixed used developments cannot be understated.
‘As demand continues to increase in we will see an increasing focus on new solutions such as mixed use developments and high specification office refurbishments to bring existing stock up to scratch.’
The firm says there is potential to bring forward more commercial space through residential-led mixed use schemes, where higher values achieved by residential could be used to cross-subsidise other uses – likely to be on brownfield sites and in urban locations.
Savills’ research identified three key hotspots for mixed use opportunities; The Royal Pier regeneration in Southampton, the Tipner-Horsea Island site in Portsmouth; and land north of Fareham at junction 10.