Since the Northern Powerhouse scheme was unveiled in 2014 there has been divided opinions on just how successful the merger of major cities would be. Bringing the cities of Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle together to create a super-region fuelled by £300 billion originally seemed like a tall order. With part of the initiative to improve the North’s economy, many argued that the already dominant Manchester, Leeds and Liverpool were already providing the infrastructure needed to grow successfully. Despite mixed feelings, since the IPPR North published its strategy for Northern economic transformation, much has been achieved.
Public transport development
The 19 transport authorities of the North have formulated plans to create a coherent Strategic Transport Plan to improve connectivity between all of the regions major towns and cities. Essentially, the plan is to reinvent Transport for London for the North. However, the implementation of this plan is entirely dependent on further funding from the government.
One project that is well under way is the £1 billion expansion of Manchester Airport. What is being dubbed the ‘super terminal’ is set to be finished by 2020, but some passengers will get a sneak peek as soon as next year with the opening of the first pier. The aim of the project is to boost capacity, cut airport queuing times and make travel an easier experience. New flights from Manchester to the likes of China and Mumbai will also be introduced to boost trade.
Northern business strategy
Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, revealed plans in November 2017 for a modern Industrial Strategy. This is set to develop the economy of the North to give regional businesses a global competitive edge.
However, Clark was keen to state that investment in infrastructure, 5G technology, improved transport and an uplift in innovation spending will provide certainty for British businesses nationwide as the country leaves the EU.
Property development in the North
Irrefutably, the property industry has seen the most impressive growth over the past four years. Due to the high property prices of the South and London, many professionals are looking to the North for employment opportunities and affordable housing comparably. Data from Hometrack revealed that the average house price in Manchester increased by 8.8% in 2017, with Leeds enjoying 7% growth.
With local economies thriving, unrivalled business innovation, and a tech boom, the number of jobs has sky rocketed across the Northern cities. Many university graduates who studied in the North are choosing to stay there to start their professional lives due to the countless job opportunities and many of the development plans across the region are creating new roles and apprenticeship schemes too. With attractive and affordable rental properties an additional perk, the North is retaining talent successfully.
Whether flocking from the south or remaining in the North post university, investors and developers are revelling in the growth of the property industry. Student and buy-to-let properties are the two major players attracting investment and West Yorkshire’s financial and cultural heart, Leeds, is one of the current hotspots, along with Manchester and Liverpool. Sheffield, Huddersfield and Preston are all emerging locations where average yields are rising. Furthermore, these areas suffer from a lack of appropriate student housing; a weakness that many investors are looking to capitalise on.
Property prices in the South
With plans for the Northern Powerhouse set to continue until 2050 we have only seen a fraction of the grand plan. However, despite being only four years into the development, the completed changes have enabled the property sales and rental markets in the Northern region to blossom.
Whilst property is positive in the North, has the Northern Powerhouse scheme had an impact on the South since it was revealed in 2014?
Despite there being a clear North South divide in the UK, the changes in the North have had a huge impact on the property market for the country as a whole. In the past, London has hogged the property spotlight and the majority of investment has been concentrated in the South and the capital. This resulted in house prices constantly climbing and increased demand for rental properties.
Whilst rental yields and property prices in London and the South are unlikely to drop drastically any time soon, growth has slowed since 2014. In April of this year, the capital recorded their first annual house price drop in nearly a decade. This ‘London effect’ seems to have rippled throughout the South, with residents of Oxford and Cambridge having to accept lower asking prices on the properties they are selling.
Overall, the Northern Powerhouse could be a blessing in disguise for those in the South who are looking to secure a home. A halt in rental yield and property price growth would certainly benefit the individuals who are trying to secure a home. If not, perhaps a move up North should be on the cards?