In the Chancellor’s autumn Budget, Mr Hammond vowed to ‘fire up the Northern Powerhouse and fuel the Midlands Engine’.
Within this commitment, he increased the Transforming Cities Fund by £240m, which will provide six new metro mayors and extra funds for transport improvements – including £69.5m for Greater Manchester and £71.1m for the West Midlands.
This was closely followed by the announcement that Channel 4 has chosen Leeds as the host city for its new head office, moving 200 of its 800 staff to the West Yorkshire city. This is just one of many big corporations that have opted to ‘northshore’ their operation. Whether C4’s arrival will have the ‘transformative’ effect for Leeds that some expect is still to be seen. Common theory would suggest that Manchester’s Salford Quay would have been a more obvious choice, since industry can typically only have a ‘transformative’ impact when grouped together – think Silicone Valley, London’s Square Mile or Manchester’s Curry Mile, for that matter. Channel 4 on its own may not transform Leeds but it is a signal that London’s dominance is destabilising and perhaps one of the clearest indicators comes in the form house prices.
Savills is forecasting house prices to grow strongly in the north of England for the next five years. House prices, according to the estate agent’s report out last week, indicates the north west will perform best. Prices in the region are set to increase 21.6% over the next 5 years, followed by Yorkshire and Humberside at 20.5%. London, on the other hand performs worst, with a forecasted house price increase of a mere 4.5%.
Infrastructural upgrades have been widely credited as a driving factor pushing forward growth to the regions. Nearly 90,000 new homes and almost 500,000 new jobs are forecast to be created as a result of HS2, a new 345-mile high speed rail network connecting the north with London. This is just one example of major infrastructure projects affecting the UK property market – read our recent article for more on this topic.
Also included within the Chancellor’s Budget were further commitments to streamline the planning process for new homes to be built. Legislation to change use class from retail to residential is hoped to free-up redundant land on the highstreets to create much needed housing. Also included was an extension of Help to Buy until 2023, as well as an extension on stamp duty exemption to first-time buyers purchasing through shared ownership.
The general mood is certainly upbeat for regional residential property investment. Encouraging forecasts inspire investor confidence and at Delph we are consistently tracking growth figures so that our acquisitions create sound investments for ourselves and the builders and developers that we partner with. The autumn Budget 2018 has renewed this Government’s commitment to enhancing the UK’s regional cities and house prices certainly reflect this. For now, the outlook is certainly looking up.