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Northern Powerhouse or Northern Flop


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Looking for a little bit of debate and opinion on the clear North/South divide of the UK, not only in house prices but all of the fundamentals that underpin them.

 

After watching Chanel 4's dispatch program 'Is Britain full?' there was some damning  statistics regarding the North in comparison to London concerning population growth (historical and future), jobs, available housing stock, investment (future and present), devolved powers for the North being watered down and projects in the North being scrapped for those in London.  The Northern Powerhouse was made out to be a token effort by those in London and the statistics seemed to show this.

 

Will the South and particularly London always get more funding and investment or will the playing field be leveled and a true Northern Powerhouse be created?  

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In short, yes. The northern powerhouse could have been an exciting economic dynamo over the next 10-20 years offering an atmosphere for growth and entrerprise that London had become too elitist and overdeveloped to provide ... But then Brexit happened. Pragmatists now realise that the economic future of the U.K. is so bleak that the big plans for northern development will have to be scaled back or scrapped all together. From a property perspective I get calls every week from sales agents trying to flog unbuilt apartments at "2016 off plan prices" because their original Chinese buyers have pulled out. They try to market this as a lucky opportunity but it's a sign that the tides have turned. 

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Hi Jagdip - there's no stats to be had here, it's just my opinion developed from the political chaos and corporate strategies expressed since last July last year. To be clear, I'm not saying that northern cities like Manchester / Leeds / Liverpool etc don't have sound investment fundamentals because they do. What I'm saying is that the implied significant economic boost to northern cities that was hyped by George Osborne and the 2010-15 coalition pre-Brexit will now never happen (for the next 20 years at least) because the circumstances around which these intentions were initially configured have now been thrown of course dramatically. Unfortunately in property terms, many developers put the wheels in motion to construct huge residential units in some of these cities prior to the referendum, and the majority were sold off-plan to overseas investors on the promise that the government had a committed strategy to invest heavily in these areas to propel growth / industry / jobs etc and thus make here investments seem like a good bet. I strongly believe that this government commitment has now gone out the window - we have far bigger problems to address and far bigger demands for government funds that will take precedent such as the financing the huge EU divorce bill, putting more resources into national defence, the intelligence services and policing, and developing strategies to prevent what big business we do currently have in the UK from uprooting to more progressive areas like Brussels, Paris, or Berlin. The northern powerhouse cannot work without combined substantial government & corporate investment, and both are no longer a feasible possibility. I therefore think we'll see a flatlining of property prices in the coming years as expectations shift to meet the new reality, followed by a dip. Not a complete disaster but it's a million miles away from what could have been.

 

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I personally never bought into the northern powerhouse idea. Yes with the investment in the area prices of property would rise but when really looked into it the figures aren't high enough. 

 

The projected rise (I think) was 25% over 5 yrs. So buy a place now for 100k and in 5 yrs its work 125k. I dont think that is enough in property, needs to be hitting 150k really. 

 

Further the monthly rental profit after taking out all of the costs including managing agent (10-12%) leaves about £150ish on average last time i checked. That's not enough either. 

 

Tieing up 30k+ to make £1800 annually providing there were no maintenance requirements is too small to warrant the investment for me personally.

 

Also what DC is saying makes sense so if the above was the best case scenario I dread to think what the worst case would be. 

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I think it would be political suicide now for this government or future conservative governments if they dropped the northern powerhouse project, considering the amount of public spending that goes into infrastructure in London.

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Thanks for everyone's input.  As has been said, the Northern Powerhouse is a great concept, but whether it will ever get the funding/investment it needs is something we will just have to wait for.  I for one am highly doubtful.  Even HS2 is entirely London centric.

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