Tax expert David Hannah claims that the government's 12 new high-growth investment zones have already begun to drive property prices in the Midlands and Northern England, and will appeal to investors.
The proposals to 'supercharge' the Northern regions with £80m of funding over five years will aim to improve skills and local infrastructure clustered around universities or research institutions. In turn, this will aid sectors such as technology, artificial intelligence, and the creative industries, which have traditionally operated inLondon.
There are 188,812 tech firms with payrolls across the UK, with 44,831 of those residing in the capital. However, the new proposals and the increasing rent costs by 9.1 per cent for properties in London are expected to prove too prohibitive for workers to stay, pushing them further North to escape the increasing cost of living.
Hannah says: “It is no surprise that renters and homeowners are fleeing from the South, especially with many choosing to move further North due to the overwhelmingly cheaper cost of housing. As of March 2023, the Office of National Statistics reported that the North East still has the lowest average house prices in the UK at £163,000, while London has the highest at £534,000.
“The recent report from the government on Stamp Duty Land Tax statistics for the 2021/22 financial year found that the UK experienced a rise in non-residential receipts, ranging from a 32 per cent rise in the East Midlands (from £200m to £265m) to a massive 80 per cent rise in the North East (from £50m to £90m). More than a third of tenants from London moved to the Midlands or North, up from 27 per cent in 2019 and above the 13 per cent of homeowners moving to the same regions.”
Hannah says there has been a concerted effort from the government to spread the wealth evenly throughout the UK and the introduction of these investment zones should increase the amount of jobs and businesses in these regions which will inevitably effect property prices.
"Not to mention providing more job opportunities for those who are currently unemployed causing a rise in wages and potential property buyers. The Chancellor did outline employment as a priority in the announcement and specifically a measure of having apprenticeships available in the skilled trades for over 50-year-olds. Naturally, this could positively affect the chronic undersupply of properties in the housing market if we have more skilled workers that are able to work in the construction sector.
"This is a good measure that helps address skills shortages, which are currently affecting 83% of businesses within the construction industry, according to research by recruitment specialist Search Consultancy. I think anything that they can do to expand the construction sector is welcomed – it is a supply crisis that we are seeing in the property market, not a demand crisis. They are focusing on getting workers to return back to work and that should inevitably speed up construction.
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