HS2 and Midland Metro lure property investors

New rail and tram schemes are triggering a wave of investment in the UK’s property sector, according to a new report.

The study, commissioned by Amicus Property Finance, concludes nearly two-thirds (63%) of property investors rated new and upgraded rail and tram links as providing the most attractive real estate development opportunities from the government’s £23bn infrastructure programme over the next five years.

Improved road transport links (55%), local authority-sponsored urban regeneration schemes (48%) and airport upgrades (43%) were ranked second, third and fourth respectively among property investors in terms of the potential offered by developing adjacent sites.

Analysis of the government-backed projects on an individual basis shows that three-quarters (77%) of property developers ranked Crossrail and Crossrail 2 as offering the most potential for residential schemes.

Outside of London and the South East, HS2 (51%) is proving the most attractive catalyst for investment, while UK Central and the M42 Corridor also makes it into the top 10 (No 7) of schemes with the most potential.

The survey, conducted last month amongst 51 of the UK’s leading property developers, shows 59% believe HS2 offers the best opportunities for residential development; with commercial property running at 51%.

It is an even split (10%) for the M42 Corridor.

Both schemes were identified at last month’s MIPIM property exhibition in Cannes for their potential investment value.

The extension of the Midland Metro does not factor into the survey but again, this was highlighted at the MIPIM event.

According to the study, an overwhelming majority (86%) of UK property developers believe that their peers are increasingly looking to capitalise on opportunities generated by the new £23bn infrastructure programme.

Keith Aldridge, founder and managing director of Amicus Property Finance, said: “The government’s decision to invest in building new infrastructure and upgrading existing assets provides a tremendous opportunity for residential and commercial property developers and we can expect this to continue for many years to come.

“The longer term impact of this infrastructure programme on regenerating existing residential communities and creating new ones cannot be underestimated, particularly when combined with the government’s renewed commitment to addressing the country’s housing gap. We have already seen growing demand among developers seeking short term finance to fund infrastructure-related residential and commercial schemes.”