COMMENT: York is the greatest city on earth. Who could deny this accolade for a place with, supposedly, the largest plastic-bottom lake in Europe, or the Yorkshire Dales on its doorstep?
Three years of living there irreversibly brainwashed me, and while I’ve slowly come to accept that not everyone is as infatuated with the Viking capital of England, there is a case for property to set its eyes on Yorkshire and the North East in the coming decade.
At EG’s Future of Real Estate summit last week, Nick Walkley, chief executive of Homes England, urged private capital to think about “places afresh” – investing in new places to live. One look at take-up figures shows how concentrated the country is in its biggest cities. Radius Data Exchange shows that between 2008 and 2017, London and the six biggest regional markets accounted for 24.8m sq ft of office take-up – about 1m sq ft less than the rest of the UK combined.
If anything, the gap is getting wider. Take-up outside the seven major markets accounted for as much as 61% of all take-up in 2012 but has decreased steadily to 51% in 2017.
Disproportionate benefit
Considering the disproportionate benefit urban areas have for the economy – 8% of UK land produces 60% of its output – we should find up-and-coming markets to invest in. Yorkshire and the North East make sense as a target. Cities such as Sheffield and Leeds have seen some of the highest growth in office take-up among major UK cities in the past decade, while smaller cities such as York and Hull have also seen take-up grow at a strong level, though from a considerably smaller base.
In the short term, some of the cities in the region that will benefit from the second phase of HS2 – including York and Darlington – have seen residential applications rise by more than 40% year-on-year. As accessibility and housing stock increase, so does the potential for attracting talent and businesses. That could solve the one downside to York – there just isn’t that much work there.
Of course, there’s one small hitch.
What’s stopping the North?
The problem with the North is infrastructure. Speak to developers in Manchester or Liverpool, and they will – rightfully – complain about the lack of east-west accessibility. This is a region with a population of more than 10m and diverse industries, and yet it lags behind the capital in countless ways. Each city has a unique offer, which means it cannot attract people in the way London, the home of absolutely everything, can – unless it’s connected.
While HS2 will cut the journey from London to Manchester to just over an hour, getting from one side of the North – Liverpool – to the other – Hull – takes between three and four hours. There’s a lovely view of the sprawling Peak District out the window, but you can see why people might not want to do that on a daily basis – especially as long as getting on a train outside major cities feels like entering an internet black hole.
Transport for the North has plans to change that with Northern Powerhouse Rail – linking Liverpool to HS2, upgrading existing lines and building a new one from Manchester to Leeds. It hopes to increase the number of people in the North who have access to four major cities or towns from 10,000 to 1.5m.
30-year plan
But this is a 30-year plan and they’re still tinkering with their strategic outline business case.
It’s a shame that, for many, fixing the North means linking it to London, rather than sorting out its internal infrastructure needs. It’s a bit like your GP treating your food poisoning by giving you a scooter you can drive to the hospital every time it hits, rather than telling you to stop eating raw pork.
So although activity is picking up slowly in parts of the North East and HS2 will increase opportunities, until there is more pressure to fix its internal infrastructure, Yorkshire will not receive the attention it, and its majestic plastic-bottom lake, deserve.
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette
