In May of 2021, it was announced by the UK Transport Secretary Grant Shapps that the controversial rail development HS2 would now travel as far as Leeds. This final eastern leg connecting Birmingham to Leeds is expected to be completed by 2040.
Critics believe the projected £106 billion investment (forecast at half this cost) would be better spent on improving the national infrastructure of the existing rail networks and the rail links between the Midlands and the North. While these areas need better transport and more investment, what will be the cost of HS2 on property investments in the North and Midlands?
The high-speed rail line is well under construction, and the London to Birmingham line is due to open in late 2026. This date follows a series of delays and budget alterations, questioning whether the whole development would actually go ahead.
The complete rail development plan will see the high-speed trains run from London to Birmingham, then onto Crewe, Manchester, and finally connecting Birmingham to Leeds. Exactly how much time will be saved is still yet to be seen. The time saving is forecast to be anywhere from 15 to 60 minutes, depending on the route and many other factors.
The Covid-19 pandemic reduced travel due to restrictions, saw people self-isolating and now, with more people working from home all putting a strain on the UK government’s coffers, some wonder if the rail passenger numbers will recover and if HS2 is still justifiable.
The progression of the Northern Powerhouse Rail project hangs in the balance, as the Government delays the publication of the Integrated Rail Plan (IRP) for another year and possibly longer. The IRP will detail how the HS2 will be integrated with the Northern Rail networks and other networks that link to it.
South Yorkshire Mayor Dan Jarvis has described the delay as “completely unacceptable”. “We desperately need the Government to provide clarity on their plans for HS2 and Northern Powerhouse Rail serving our region. They’re prolonging the uncertainty for businesses and people living on the proposed HS2 route in the North.”
What will be the cost of HS2 on property investments in the North?
Many living and working in the North and the Midlands welcome the infrastructure developments and rail expansion because it will help bring prosperity back to areas that have suffered since the travel networks have been allowed to decline in these areas. There will likely be a much needed boost to the property market in areas that haven’t seen this for a long time.
Any transport improvements in these areas are likely to boost their appeal to visitors and those wishing to relocate home or business, in turn, increasing the local economy and house prices. The “HS2 effect”, as it has been dubbed, has already driven house prices up by 14% in just two years, according to Knight Frank.
Improved transport links and infrastructure in Birmingham and all the towns and cities on the planned HS2 route will likely see more significant property investments alongside business investing.
According to Gilliard Homes, “Birmingham has become an investment hotspot not only for property but also for companies looking to relocate their business. From global businesses to British greats, Birmingham has seen names as big as HSBC and Deutsche Bank move to call this Midlands hub home. It comes as no surprise that, in 2015, Birmingham was recognised as one of the most investable cities in the UK, with companies from all over the world showing a vested interest.”
It seems the prospect of speedier rail service to Birmingham has already boosted the local economy. There is little doubt more investors will come and with it more jobs; this is what the midlands and north need after experiencing even greater challenges as a result of the pandemic.
With improved connections, more people will choose to live and work in these areas, which are likely to increase house prices, making all the areas on the HS2 and Northern Powerhouse Rail project attractive places to invest. As Birmingham is the project’s first stage, property investors would be wise to make that move sooner rather than later.
It seems there has never been a better time to invest in the property market than in 2021 when so much work is being done to improve the infrastructure of the UK.
The second phase of the HS2 development will see other cities and surrounding areas like Manchester and Crewe also reaping the benefits of improved travel links and improvements to the existing rail lines.
The high speed rail network will make more of the UK commutable. This will bring a welcome boost to the economy with property investment and house price appreciation which has already been seen in many areas connected to these British infrastructure developments.
Cengizhan Cerit is a Turkish/British businessman. He has a long-standing and successful career in both residential and commercial property maintenance, property investment and entrepreneurship.
He leads two property management firms, SISI Property Ltd and Meden Ltd that he operates out of Ashford and London. With his strong interest in culture and business sectors, he continues to successfully develop both of these property firms.
Cengizhan Cerit is constantly updating his website with regular content covering all aspects of property investment, management and entrepreneurship.