THE NORTH of England is set to become the hotspot of UK property development according to a national study of developers.
The research demonstrated that almost two-thirds (65 per cent) plan to increase their investment activity in the North substantially over the next two years, with the biggest opportunities seen as being in houses and flats, according to a study by finance specialist Together.
Over half (57 per cent) earmarked the North East as Great Britain’s most opportunity-rich region, followed by the North West (42 per cent). Wales (40 per cent) and Scotland (38 per cent) were also seen as strong contenders for investment, trailed by Yorkshire and Humberside (22 per cent) and the South East (13 per cent).
Property developers are almost unanimously supportive of the Government’s Northern Powerhouse initiative with 96 per cent describing it as having had a positive effect, of which 64 per cent said it has been ‘very positive’.
Andrew Charnley, head of corporate relationships at Together, said:
“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. Our own experience reflects these findings having supported a significant number of new developments in the North with a healthy future pipeline too.
“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. We understand the pressures facing developers and take a highly flexible approach to meeting their finance requirements, often delivering solutions under highly challenging timescales.”
According to the study, houses and flats (selected by 91 per cent and 80 per cent of respondents respectively) offer the biggest development opportunities in the North of England, followed by semi commercial properties (42 per cent) such as bed and breakfasts and restaurants (28 per cent).
Despite property developers’ optimism, the survey identified several headwinds that are likely to impede their ability to invest in new assets. Half (51 per cent) of developers cited a shortage of available sites closely followed by insufficient access to finance (47 per cent) and a lack of government support (40 per cent). A third (33 per cent) of developers worry about Brexit uncertainty.