Is the Northern Powerhouse running out of steam?

by:
  • 24/08/2017
  • 0
Is the Northern Powerhouse running out of steam?
It was billed as the initiative that would close the North South divide and create countless possibilities for development and investment in the North of England.

Yet in recent weeks the Northern Powerhouse rhetoric has take a more negative turn.

Last month, transport secretary Chris Grayling announced that planned electrification of railway lines in the North, the Midlands and Wales had been scrapped, replaced instead by ‘bi-mode trains’. The project had been labelled the “Crossrail for the Northern Powerhouse” and Grayling’s decision to scrap it was met with criticism.

Meanwhile, Liverpool City Region Metro Mayor Steve Rotheram was quoted in the Financial Times calling for the Northern Powerhouse project to be ‘jump-started’, claiming the scheme had stalled over the past year.

But how important is the scheme to the development industry in the North? And how detrimental will it be if the plans continue to be watered down?

“The last few years have seen a good increase in new investment coming into the North, however this really is just a small amount in terms of what is required to help significantly lift the micro-economies in this part of the country,” says Ashley Ilsen, head of lending, Regentsmead. “The problem I have with schemes such as the Northern Powerhouse is that they make for excellent political soundbites but when it comes down to substance there is very little in terms of actions being taken to improve the current situation. I’m not surprised that much of this has already been scrapped.

“Infrastructure improvements should be the priority however as a development finance provider I think more should be done to bring jobs and incentives for housebuilders in the northern regions; this is already an area where we have dramatically fallen short. My concern over the coming years is that with our impending exit from the EU I suspect we are going to see housebuilders struggle as costs are set to rise. The ones who are likely to be worst hit as a result of this will be those with tighter margins and a slower sales period, so unless we see government led incentives and serious levels of investment come into the North then I suspect the gap between the North and South of England will continue to become greater.”

James Bloom (pictured), managing director of development finance at Masthaven, is more positive about the initiative but says the whole of the region must benefit.

“I think it’s important that any further funds reach other areas so it’s not just concentrated on a few places (for instance, Greater Manchester is getting nearly twice as much funding as Leeds, which has a similar sized population).

“Areas that will benefit from the new high speed rail links, and strong commuter links to major cities, are really interesting hotspots to keep an eye on. However, the ‘watering down’ of rail route plans could potentially adversely affect returns; I think the devil will be in the detail.”

 

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Bridging

Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.

Commercial

Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions

Read previous post:
A landlord hands her tenants a set of keys
Landlords in the capital turning to short-term lets

New research from the Residential Landlords Association has suggested landlords in London are increasingly using their properties for short-term holiday...

Close