Northern Powerhouse plans have had a huge impact on investment in the UK. Billions are being invested into new projects, infrastructure and regeneration in the core cities of the North. This ambitious plan has generated new organisations, partnerships and investment. Entities like the Northern Powerhouse Investment Fund and the Northern Powerhouse Partnership have also played a key role in new Northern Powerhouse developments. We take a look at what is pushing the impressive growth and investment forward. Investment property in Northern Powerhouse cities is also increasingly in demand, now more than ever.
What is the Northern Powerhouse?
The Northern Powerhouse is a government-led initiative to boost the economy in the north of England. The proposal is a government attempt to address the south-eastern focus of economic activity in the UK. The Northern Powerhouse has six ‘core cities’ – Liverpool, Leeds, Manchester, Newcastle, Hull and Sheffield. The project was introduced by the Conservative coalition government and spearheaded by George Osborne. The current Prime Minister, Theresa May, has committed to continuing the work on the Northern Powerhouse, promising to “help the great cities and towns of the North pool their strengths and take on the world”.
What is the Northern Powerhouse Investment Fund?
The Northern Powerhouse Investment Fund aims to help fund the ambitious development programme. It is made up of funding from the UK government, British Business Bank, European Development Fund and European Investment Bank, together with Local Enterprise Partnerships (LEPs). The £400 million Northern Powerhouse Investment Fund aims to assist businesses in the region with growth through funding. Companies can access finance through applications which are granted by Fund Managers. Small and Medium sized businesses in the North have been able to access the finance they need. There is a range of funding options available through the Northern Powerhouse Investment Fund.
By working with local partners, the fund has been able to finance smaller projects with potential for large-scale growth. This leads to an increase in job opportunities. It has also been funding infrastructure projects and new Northern Powerhouse developments. As well as providing access to finance, they provide business support and training through local providers.
What is The Northern Powerhouse Partnership?
The Northern Powerhouse Partnership is an independent body whose purpose is to coordinate and promote the Northern Powerhouse. They develop awareness of the strategy and encourage participants to work together. The Northern Powerhouse Partnership is made up of businesses and city leaders. They are run by a business led board and are not affiliated to a political party. It also works on the Northern Economic Independent Reviews and Reports. The Northern Powerhouse Partnership should be one of the forces that will be checking in on the progress of the multiple projects and developments. Government funding alone will not be enough to transform the North of England and private investment is fundamental. Events like the Northern Powerhouse Conference, with over 2,300 delegates in attendance, help build relationships and joint efforts.
Local Leadership Projects have also boosted the Northern Powerhouse plan. The government’s commitment to the strategy and it’s contribution to the Northern Powerhouse Investment Fund have certainly played a part in driving progress. The introduction of regional mayors was a huge part of this. The power and resources allotted to them allowed more autonomy for local leaders. Some have argued that the regional mayors don’t have the funds they need to push forward plans. Despite this, these new local officials have made it easier to approve a variety of projects in key city regions. Certain areas are now Mayoral Development Zones – in Liverpool, there are five. The zones allow specific regions to become the focus of Northern Powerhouse investment and demonstrate the potential success of the widespread investment in the city. With the Mayoral Development Zones, you can see how investment property in one development encourages others to choose the location too.
Northern Powerhouse – The Wider Impact
As well as focussing on the economy, the Northern Powerhouse strategy has boosted innovation, education and infrastructure. Northern Powerhouse developments have also supported growth in the arts. There has equally been significant investment in new art spaces, cultural events and arts-based businesses too. These businesses accessed microfinance through the Northern Powerhouse Investment Fund and expand their work. Growth in London and its surrounding area has slowed due to a range of economic factors. This is encouraging investors to look to the north for better returns on their investment. The region has seen growth in investment property, with a wide range of new Northern Powerhouse developments.
Planning for the Future
By offering to finance a wide range of businesses across many sectors, it allows the economy to diversify. £70 million has been allocated to the Northern Powerhouse Schools Strategy. This funding will boost the educational opportunities for young people growing up in the North. Importantly, universities in the North have also seen considerable investment, attracting students to the area who add a great deal to the economy. Investment in education can also be a significant force in driving the future of the Northern Powerhouse plan. With long-term goals and focus on critical skills gaps, investment in education is of great importance for the longevity of the Northern Powerhouse.
Impact on Northern Powerhouse Residents
The Northern Powerhouse plan should be making improvements to the quality of life for people in the North. Quality of life is another area where the disparities between the north and south are apparent. With improvements to education, transport and new developments in the arts and leisure a multi-faceted approach is designed to make a difference. Improved job opportunities will lead to increased economic stability for residents. Better job prospects also allow them to have more disposable income to put into the economy. Connectivity and transport links between the cities of the Northern Powerhouse can lead to a combined improvement of the region, with more inward investment and collaboration across the cities.
Working together in the North
Organisations like The Northern Powerhouse Partnership have been attempting to form links between the cities and encourage joint ventures. On 6th July 2018, the minister for the Northern Powerhouse Jake Berry MP announced the creation of NP11. It will be a government-funded board made up of the leaders of the 11 Local Enterprise Partnerships. The aim is to represent the various regions equally, encouraging them to advise and work with the government on strategies. The plan is to increase productivity and drive forward the Northern Powerhouse to fundamentally tackle the north-south divide.
Growth Sectors in the Northern Powerhouse
Certain areas of the economy are pushing growth more than others. The leaders of the Northern Powerhouse Partnership are researching and championing these industries. Sectors like the digital sector have seen immense growth in the last ten years. The top five growth clusters in the northern powerhouse are professional services, business services, digital, creative and logistics and e-commerce. There are regional differences across the core cities, for example, digital services have been growing in Manchester and Leeds, but not at all in the Humber region. Northern Powerhouse developments are also providing homes for these growing businesses.
The focus on boosting the northern economy is creating positive results already. In 2015/16 projects increased by nearly a quarter compared to the previous year, twice the national average. Northern Powerhouse developments are being boosted by funding from the Northern Powerhouse Investment Fund. It has also benefitted from international investments, from countries like China and Saudi Arabia. Business people from around the world have been visiting to see the increasing number of Northern Powerhouse developments. As a result of this, £3.4 billion was allocated to the North through growth deals.
Northern Powerhouse Developments
Specific examples of Northern Powerhouse developments include MediaCityUK in Salford, Liverpool Waters and the Advanced Manufacturing Innovation District in Sheffield. Overseas visitors have also been keen to purchase property in the region. Over 200 investments were completed in the 10 LEP zones in the Northern Powerhouse, and these have driven progress in the area. The Northern Powerhouse Economic Review forecast 850,000 new jobs and an extra £97 billion in the northern economy by 2020.
Demand for Rental Accommodation in the Northern Powerhouse
A number of students and graduates are flocking to the northern core cities. Increased job opportunities and more affordable living costs are key factors in this. Often these new residents are young professionals, who are looking for rental accommodation with city centre locations and easy transport links. Property in the North is significantly more affordable than comparable southern properties. Currently, property development in the region at an all-time high. The high demand for rental accommodation has been a key role in individuals looking to work and live in Northern cities are looking for high-quality accommodation. New property developments, with modern apartments and studios, can begin to provide this.
Northern Powerhouse Investment Opportunities
For investors who traditionally would have focused on properties in London or the South East, the Northern Powerhouse has encouraged them to look North and take advantage of the huge new opportunities. From new off plan apartment buildings to renovated warehouses, property values in the North are continuing to grow. With far lower initial costs compared to the South East, investors are finding they get far more for their money too. Luxury Apartments by RW Invest are a great example of the kind of high quality, modern investment property that’s needed. With an increase in professionals who have been attracted by new employment opportunities, the demand for city centre accommodation is growing too. The buy to let opportunities available in the Northern Powerhouse Region offer low initial costs and potentially huge rises in property value.