More than a third (38%) of tenants from London moved to the Midlands or North, up from 27% in 2019 and above the 13% of homeowners moving to the same regions.
UK residential landlords in the Northern regions can expect property prices to increase with the government’s announcement of 12 new investment zones in the Spring Budget. The zones, which will receive £80 million of funding over five years, will be located in the Midlands, Greater Manchester, Teesside, Liverpool, and other areas with tax and regulatory rules intended to drive economic growth. The initiatives aim to improve skills and local infrastructure around universities or research institutions to aid modern industries such as technology, artificial intelligence, and the creative industries.
According to David Hannah, Group Chairman of Cornerstone Tax, the investment zones will attract more businesses and jobs to these regions, causing a surge in property prices. With an increasing number of people leaving London and moving to the North, particularly the Midlands, the new investment zones are likely to exacerbate the chronic under supply of housing in Britain.
The government’s proposal to “supercharge” the Northern regions with £80 million of funding over five years will aim to improve skills and local infrastructure clustered around universities or research institutions. In turn, this will aid sectors such as technology, artificial intelligence, and the creative industries, which have traditionally operated out of London. There are 188,812 tech firms with payrolls across the UK, with 44,831 of those residing in London. However, the new proposals and the increasing costs of rent by 9.1% for properties in the capital are expected to prove too prohibitive for workers to stay, pushing them further North to escape the increasing cost of living. As of January 2023, the Land Registry reported that the average price for a house in the North East of England was £126,600 while the average cost in the South of the UK is £337,100 making the South £210,500 more expensive than the North East.
The recent report from the government on Stamp Duty Land Tax statistics for the 2021/22 financial year found that the UK experienced a rise in non-residential receipts, ranging from a 32% rise in the East Midlands (from £200 million to £265 million) to a massive 80% rise in the North East (from £50 million to £90 million). The East of England and the North West are the second and third most popular locations for housing market activity, with 39,237 and 38,838 property sales, respectively.
