Deloitte Real Estate bullish on regional investment prospects

After months of thinkpieces and expert comments celebrating a return to recovery, with speculation as to what a stabilised market could mean for regional development, we’ve reached a point where we need a real forecast and plan of action for 2014/15.

The first half of 2014 has already garnered impressive results, with a 222 per cent increase in transaction volumes in the North West that represented £1.32bn of investment in the region’s property. General stabilisation of the UK economy has certainly played a part in improved performance in the property market, but there are plenty of other springboards for further growth in the region.

The launch of One North earlier this month, which will bolster the prospects for long-anticipated plans for the creation of a northern powerhouse with “HS3” rail link, is the strongest indicator yet of the region’s prominence in national and international business. HS2 represents an extremely promising start for inward investor interest in Manchester, while investment of £15bn in a connected network of northern links will solidify the reputation of the city and its neighbours as viable areas for business and property investment.

Manchester’s profile as the UK’s ‘second city’ is increasingly evident, as prime office rents continue to outperform those in other key regional cities, and it is increasingly recognised as exciting and viable alternative to London. With rents overheating at an incredible rate in the Capital, Manchester is poised to attract businesses that want to relocate from the City but maintain strong growth.

The Northern Powerhouse concept would undoubtedly provide another shot in the arm for investor confidence in Manchester, but it would also bring greater development opportunities to Liverpool, Leeds, Sheffield, and Newcastle. This in turn will have a positive impact on other regional towns, establishing a base for businesses that provides all the amenities and resources at a fraction of the cost of London.

What Manchester, Liverpool and the region’s other growing towns and cities now need is to build on the theme of creating neighbourhoods of choice – developing new residential areas that can support and match the economic growth ambitions of each area

This is very much on the agenda, as evidenced by the influx of recent housing initiatives with the HCA introducing its new investment programmes to stimulate market conditions. These will see more capital made available in order to support schemes ranging in size from 15-1,500 units, an approach that will widen accessibility, as funding is made available to better support projects of all scales.

Place-making is key to supporting the creation of truly sustainable communities. Manchester and Liverpool are already renowned for their thriving leisure and culture scenes, but new communities on the fringes of the city centres will need careful planning to ensure the creation of places where people genuinely want to live – residential offer is key to the economic growth strategies of both cities.

All regions of the UK took a hit during the economic downturn, but the North West has remained relatively resilient and is now ready to turn to face a global stage.