Almost two-thirds of developers intend to increase their investment in the north of England over the next two years according to new research.
Property developers remain bullish under today’s market conditions, findings from a report by finance company Together reveal, particularly when it comes to opportunities in the north of England.
The study showed that 65% of developers plan to place more of a focus on parts of the north, led by investment in the north-east, cited by 57% of respondents, followed by the north-west for 42%. The south-west and East Anglia came lowest on the list for top building opportunities, with 6% and 7% respectively.
Northern Powerhouse powering investment
A major part of the attraction to the higher parts of the country has come from the government’s Northern Powerhouse initiative, which has seen more powers and investment given to parts of the north with a focus on devolution of power away from London. According to the report, 96% said the initiative had a positive effect, and 64% described it as “very positive”.
Investment in regeneration, housing, job creation, infrastructure and public transport are all attracting more private investment and improving many parts of the north – from the big cities to more regional towns.
The effects of this investment have also led to a huge increase in “Northshoring”, with many major companies relocating or adding headquarters and additional offices in the north. While London is still the hub for many businesses, areas like Manchester, Leeds, Birmingham and Liverpool are continuing to gain pace.
Breaking through the barriers
Andrew Charnley, head of corporate relationships at Together, said: “Given the uncertainty around Brexit and the prospect of tougher economic headwinds, it’s encouraging to see developers remaining so bullish, particularly when it comes to the north.
In terms of obstacles for developers, around half (51%) said the shortage of available sites prevented them from building and investing in new assets, while insufficient finance affected 47% and a lack of government support hindered 40%. While Brexit continues to breed uncertainty, only a third of developers said they were affected by that.
Treasury Investment in the North
The Treasury is reportedly planning to rewrite rules governing public spending in a move that may benefit areas in the Midlands and North of England.
The changes would make it easier for cash to be allocated to projects outside of London and the South East.
It could help boost investment in infrastructure, business development projects and schemes like free ports.
The Treasury has not denied the reports.
Current rules require the government to allocate cash to projects that promise the biggest economic benefits.
Those projects tend to have the most impact in areas with more people and businesses.
But under the new plans, investment decisions would be made with a focus on reducing inequality between northern and southern England, rather than promoting overall economic growth across the country.
It will affect decisions made about projects ranging from rail improvements to investment in scientific research.