Developers regard the North of Britain as having best opportunities
Nearly two thirds of British developers say they are set to invest more in the North of England by 2021, driven by the Northern Powerhouse initiative.
Residential houses and flats seen as offering the biggest opportunities but shortage of suitable sites and access to finance are leading obstacles, according to a study by Together.
Overall, some 65% plan to increase their investment activity in the North substantially over the next two years with 57% regarding the North East as having the best opportunity.
Some 42% say the North West is top of their list, 40% Wales and 38% Scotland while just 22% see Yorkshire and Humberside as having opportunity and 13% the South East of England.
The study also reveals that property developers are almost unanimously supportive of the Government’s Northern Powerhouse initiative with 96% describing it as having had a positive effect, of which 64% said it has been very positive.
‘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,’ said Andrew Charnley, head of corporate relationships at Together.
‘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,’ he added.
According to the study, houses and flats, selected by 91% and 80% of respondents respectively, offer the biggest development opportunities in the North of England, followed by semi commercial properties at 42% and restaurants at 28%.
Despite property developers’ optimism, the survey identified several headwinds that are likely to impede their ability to invest in new assets. Some 51% of developers cited a shortage of available sites closely followed by insufficient access to finance for 47% and a lack of Government support at 40% while 33% of developers worry about Brexit uncertainty.