London’s attractiveness to the super-rich foreign investor combined with the large number of people moving to the capital has seen property values skyrocket. The rest of the UK lags far behind the capital in this regard. However, the first signs that this trend is being reigned in have recently become apparent.
The Government’s ‘Northern Powerhouse’ scheme is designed to boost economic growth in the North over the coming years, particularly in the so-called ‘core cities’ of Manchester, Leeds, Sheffield, Liverpool, Hull, Sunderland and Newcastle.
Manchester and Leeds have always been big regional players and are now becoming more influential nationally.
The ‘Powerhouse’ is set to take in many different areas. Transport is grabbing all the headlines; the HS2 debate is still rumbling on and ambitious plans are being drawn up to link the regions together more efficiently in order to drive progress. Manchester Airport is receiving £1bn in investment over the next decade and providing direct links to China.
Re-development of the North’s great ports is continuing. A new deepwater container port and cruise liner terminal at Liverpool, the inland tri-modal Port Salford project, the innovative biomass and wind energy centres planned for further power generation on the Humber.
For centuries the North has made things. The region will finally, deservedly be supported properly. Manufacturing is to be bolstered once again in the engine of the Industrial Revolution. The Government has recognised that an economy based solely on finance and business services is not fit for purpose in the modern world and is planning steps to diversify the UK’s economy accordingly.
Further investment in the world-leading science and engineering of the North is to be prioritised as the universities work as the brain of this new era. The revolutionary work with graphene in Manchester. The advanced metals and manufacturing of South Yorkshire. The world-leading medical research of the North East.
All of this and much, much more is just the beginning.
However, arguably the most important pillar of the ‘Northern Powerhouse’ is the new wave of housebuilding which must be at the heart of such an enormous project. Investing in transport, manufacturing and research means little if people have nowhere to live.
Manchester and Leeds are set to be key beneficiaries of this construction drive. Both are noteworthy hotspots for property investment. Research from Savills has named both cities in its list of Top 10 Buy-To-Let list.
Developments such as Adelphi Wharf in Manchester and X1 Aire in Leeds are setting a new standard for modern urban living.
Research by JLL highlights the incredible growth we can expect to see in these cities.
Manchester is projected to see a 5.5% increase in house prices and a 5% increase in rents over 2016. A lack of large scale new developments being constructed or reaching completion in 2016 is also expected to contribute to steadily rising prices and yields. The city’s place at the centre of the ‘Northern Powerhouse’ ensures that this is not a short term trend. Manchester’s large student population and status as a destination for young professionals will only reinforce its status as a prime investment opportunity.
The market in Leeds is looking equally buoyant. Residential developments have started in Leeds city centre again following a five year break. House prices and rental yields are set to increase by 4.5% and 5% respectively in 2016. Leeds is home to the largest workforce in the country outside of London, investment is starting to pour into the city again and the housing market is beginning to pick up in response.
As with everything, the ‘Northern Powerhouse’ will rest on the shoulders of those who will build it. The long standing talent drain from the regions is well documented as the best and brightest are tempted by the jobs, opportunities and lifestyle of London. If the re-development of the North is to be a success then it is imperative that most talented people, both from the UK and the rest of the world, see our great cities as an attractive, realistic place to live as well as work.