Devolution just makes sense

If there is one thing we have seen over the last year it is increased discussion around devolution. I’m all for devolution and devolving more to regional cities because one thing they have shown since the world financial crisis is the ability to come back fighting. Yes London is the capital and let us be honest it will never be matched in the UK, however with improved infrastructure and connectivity it’s only fair for other cities to take their fair share of the pie.

 

In 2014, investment outside of the capital rose by 35% - so why the sudden change of sentiment? Well the reasons are vast. Firstly the class of assets is improving in the regions, the strong economy in the overall UK compared to the rest of Europe (basically less chance of deflation here, apparently) and consumer demand. There is also the relative excitement, for some, of large infrastructure projects like HS2 and HS3 on the horizon which will increase connectivity across both the north and slightly improve to London.

 

To aid devolution there needs to be more transfer of power than at present, further schemes like that announced for Manchester is a start but a wider review of business rates is needed and particularly a rebasing of rates. By allowing local authorities a much greater say will allow the right level of development to really boost the local economy.

 

So how would I invest, simple, I’d take up workspace properties across the northern cities. If you take Sheffield or Leeds there is a large number of unique and quirky buildings. They look run down and need more than a lick of paint but at a reasonable price and some tender loving care (or even just making modern with Wi-Fi) then you could see a decent return. Call me a risk taker but it makes sense.

 

Locally Leeds has benefited most recently, I mean not many places can claim Google as a tenant, and in 2014 witnessed a significant increase in activity. As further developments begin to soar from the ground the key is taking advantage of the success and really shouting about it.  Across Yorkshire they are using their heritage to create business clusters. The success of steel making has seen local steel and titanium manufacturing expertise and further manufacturing expertise championed as places like the Advanced Manufacturing Park and Advanced Nuclear Research Centre.

Ultimately devolution has the potential to really boost economic growth and here’s hoping that local economies like Leeds, Sheffield and Manchester firmly step from the shadows of London. The recent deal struck for West Yorkshire Combined Authority provides for a different working relationship with agencies like the Homes and Communities Agency which will allow for greater say over housing planning – focussing investment in priority areas. However the current deal doesn’t go far enough and to really create a “Northern Powerhouse” then further devolution (including fiscal devolution) needs to be put in place.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend

Lee

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