Two-thirds of property developers intend to increase their investment in the north of England, finds a new research from Together
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.
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.
Head of corporate relationships at Together, Andrew Charnley said that 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.
He said their own experience reflects these findings having supported a significant number of new developments in the north with a healthy future pipeline too.
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.
Charnley added that the chronic supply/demand imbalance in residential housing is creating the biggest opportunities yet many developers continue to be hampered by obstacles such as a shortage of suitable sites and access to finance.
He said that they understand the pressures facing developers and take a highly flexible approach to meeting their finance requirements, often delivering solutions under highly challenging timescales.