THE INTERMEDIARY MAGAZINE - REGIONAL FOCUS: NORTH WEST ENGLAND - CARL GRAHAM
14.02.23
REGIONAL FOCUS: NORTH WEST ENGLAND.
By Carl Graham, Tuscan Capital Limited.
The North West of England is a vast and diverse region of the UK, spreading from Cheshire to Cumbria and encompassing the varied and exciting cities of Manchester, Liverpool, and Carlisle.
Home to more than seven million people, the North West has long been a drawcard for those seeking culture, diversity, or adventure in one of the region's many areas of outstanding natural beauty.
Despite this, years of underinvestment in transport, infrastructure, and research and development in the region has created a North-South divide across the UK, particularly in the housing sector, where undersupply and high demand are thwarting the area's aspirations for economic growth.
The North West of England receives one of the lowest levels of investment among advanced Organisation for Economic Cooperation and Development (OECD) economies, placing ahead of only Greece in terms of private and public investment, according to recent research from think tank IPPR, while the rising cost of living, higher interest rates, and soaring inflation have also had an impact on the local economy.
Good Value.
Nevertheless, the region offers significant value for money in terms of rental costs and property purchase prices, particularly in comparison with areas in the South. The housing sector is also extremely diverse, with a sizeable spread of average prices, ranging from £117,800 in places like Burnley to £375,600 in Trafford.
Currently, global economic challenges are driving up rents, impacting the private rental sector, with higher valued areas likely to suffer from compressed yields, ultimately limiting the ability of buy-to-let landlords to leverage higher loan-to-value (LTV) products.
However, the opposite can be said for areas where capital appreciation isn't so prolific, but where rental demand is still strong. With this in mind, professional landlords are likely to continue to focus on assets where capital appreciation and strong rental demand are available. This is something we are seeing at Tuscan.
There are also plenty of opportunities for growth in the serviced accommodation sector, where we continue to see demand from developers and landlords looking to convert hotels and B&Bs into self-contained serviced accommodations.
The region is also set to receive a proposed share of the Government's £600bn Housing Infrastructure Fund, designed to provide support for new and existing communities and make more land available for housing in high-demand areas.
While it is hoped the funding will help stimulate housing and infrastructure growth across the region, it still remains unclear how far this will reach, and the benefits it will bring to the local economy.
Improved Connectivity.
The continued infrastructure upgrades to the electrification of the Outer Manchester railway lines, however, is a positive move, creating more opportunities for peripheral towns and villages to capture the commuter market, and for improved connectivity between key Northern towns and cities.
Unfortunately, the injection of cash into the North now looks to be less than previously anticipated, despite Lancashire City Council being given the green light to construct the proposed Eden Project Morecambe. While the win is an exciting opportunity for the region, its creation is dependent on further capital raising, and perhaps the backing of private equity or venture capitalist firms.
Get in touch to find out more by calling on 07759 648713 or emailing cgraham@tuscancapital.co.uk
Read the February edition of The Intermediary Magazine here.
For more information or to get in touch with the team, please contact us:
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Email info@tuscancapital.co.uk
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A range of case studies demonstrating examples of previously completed loans can be found here.