The initiative was launched in 2015 by George Osbourne, the UK’s then Chancellor of the Exchequer, and involves a considerable investment in local skills, innovation, transport and culture. To date, the UK government has committed:
- £13bn in building modern transport links to improve connections within the Northern region and to destinations outside of it;
- £3.4bn to equip local people with the opportunities they need to drive growth;
- £70m in the dedicated Northern Powerhouse Schools Strategy to improve education and skill levels;
- £150bn in health initiatives.
Furthermore, the government is currently working with local stakeholders to create a revolutionary new style of governance where directly elected local mayors can make decisions for their community to keep the power of the north in the north.
The combined force of this government investment and devolution of powers has meant that the cities within the Northern Powerhouse are prime locations for property investment and buy to let.
The Engine of the UK
If the Northern Powerhouse region were a country, it would be the eighth-largest economy in the Europe Union. The region delivers over a quarter of the UK’s total manufacturing output, nearly half of all medicinal exports and a third of the UK’s renewable energy.
Despite these strengths, growth and employment rates in these regions have fallen behind the rest of the UK since the 2008/09 recession. As a result, major regeneration and infrastructure projects are taking place across the region, taking advantage of existing strengths to set new standards for growth and opening up prime investment opportunities.
Major Regeneration and Infrastructure Projects
Liverpool Waters, Liverpool
The £5.5bn Liverpool Waters project will transform the city’s derelict docks into a sprawling commercial and residential waterfront space to rival the very best in Europe. When complete, the development will include 23,000 apartments and four hotels across 21m sq ft. It’s set to deliver 17,000 full-time jobs and bring the city’s much-loved docklands back to life.
MediaCityUK, Greater Manchester
Covering 200 acres, MediaCityUK opened in 2012 and is home to the likes of BBC, ITV, Ericsson and Salford University. With studio costs 50% lower than London and staff costs 40% lower, it is no surprise that MediaCityUK has become the biggest purpose-built media location in Europe, with over 250 creative and digital companies located there. Following the approval of £1bn expansion plans in 2016, the site is now set to double in size.
Advanced Manufacturing Innovation District (AMID), Sheffield
AMID is a 2,000-acre centre of excellence for innovation, research and technology that was born out of a unique partnership between Sheffield’s two universities, private business and government. Amongst its world-renowned occupants are Boeing, McLaren Automotive, Rolls-Royce and Toshiba.
HS2, throughout the region
HS2 is a multi-billion-pound high-speed railway line will connect major cities within Northern Powerhouse to one another and the capital. The first phase, which will cut journey times between London and Birmingham to just 48 minutes, is expected to open in 2026. The second phase extends the line to Manchester, Leeds and Liverpool, amongst other cities and towns, and is expected to be completed by 2033 – again, cutting journey times dramatically.
HS2 is expected to deliver a total of £43.7bn in economic benefits, while the London-Birmingham section alone is expected to create around 40,000 jobs. The new rail link will treble the capacity of the current routes and open up enormous opportunities for tourism, business and investment.
Significant Growth Projections
The Northern Powerhouse has enjoyed higher price growth and higher expected yields than anywhere else in the UK as well as lower than average property prices. Furthermore, jobs, population, tourism and exports are all seeing significant increases:
- Liverpool’s population grew 181% between 2002 and 2015, more than any other city in the UK.
- Manchester has experienced the highest job growth in the UK, increasing by 84% between 1998 and 2015.
- Property prices in Manchester are expected to increase by 22.8% by 2022, compared with 12.6% for the UK as a whole.
- Liverpool has three of the top ten postcodes for rental yields in the UK – more than any other city in the country.
- Goods exports in the Northern Powerhouse have increased by 16.1% since 2010.
With a GDP of £300bn, a 15m-strong consumer economy, and a wealth of targeted financial support from the government, demand for high-quality housing in the Northern Powerhouse is expected to increase significantly over the coming years. These factors along with the impressive growth the region has already shown, make the Northern Powerhouse one of the top property investment destinations in Europe. It is why we at Alesco have made it our primary focus.
If you’re interested in capitalising on the property investment potential of the Northern Powerhouse, you can view our exclusive buy-to-let opportunities here; to hear about our full range – including our off-market options – give us a call today or fill in your details below.