Only a few days ago we looked at the number of new builds across the UK with a significant increase during March to May 2015 compared to the corresponding period in 2014. The average rise right across the UK came in at just under 15% although performances were varied to say the least. London aside, where there was a 19% reduction in the number of new builds, the north-east of England was the only other region to show a fall. So, does the north-east of England property market offer good value going forward or will more bad news follow?
More broken promises
The high-speed rail link which was forecast to significantly reduce travelling times between the North of England/Scotland and London has been shelved for the moment. This multi-billion pound upgrade was seen by many as a starting point for the revival of the north-east of England which has struggled in recent times. While this is obviously a setback in the short to medium term, there is no doubt that future governments will need to give more prominence to this area which has been starved of investment.
Decentralised public services
While there are already some large scale public service operations in and around the Newcastle area many experts believe that only further decentralisation from the south of England/London is the answer. This decentralisation of public services, very often to lower cost areas, is in many cases a win-win situation with running costs reduced and increased employment in the region.
There has been talk of a “northern powerhouse” in recent times and rumours of a close working relationship with the Scottish government has reared its head on more than one occasion. It would be wrong to suggest that all areas of the North East of England property markets are on their knees but the fact remains they have not benefited to the same extent as other areas of the UK.
New build numbers
During the period March 2015 to May 2015 there were 1427 new builds in the north-east of England. This reduction of just under 15% over the same period in 2014 is disappointing to say the least especially when you bear in mind that the UK economy improved over that time. There are a number of factors coming into play such as affordability for first-time buyers but the local economy and local employment market also play a significant role.
We only need to look towards the Sunderland area to see the impact that Nissan made with its ever expanding operations and there are hopes this can be replicated across the region by other companies. It may take time, it will not happen overnight but many people believe that there are opportunities to acquire relatively low-cost properties in the north-east of England with the potential to make significant returns in the longer term.
While it is dangerous to take one set of figures in isolation, there is no doubt that the new build figures we refer to are very disappointing for the region. At a time when the rest of the UK seems to be demanding more and more new properties there has been a reduction in the north-east of England. We can only hope that governments going forward are good to their word and at least play their role in creating what politicians have described as a potential “northern powerhouse” of the future.