Why Midlands could fuel the next Property Boom

Halifax's report in January of this year suggests that first-time buyers now need to find an extra £10,000 to get onto the property ladder compared to a year ago. This as a result of house prices increasing by 7.3% over the last year (Nationwide house price index). The report also indicates that the average deposit needed for a first-time buyer in the midlands is 40% less (£39,052) than in the south-east (£64,910). Couple this with an increase in remote working here to stay due to the pandemic and HS2 phase 1 between London and Birmingham expected to be completed by 2028; this could potentially put the midlands in pole position to fuel the next property boom. We explore below some reasons why the midlands are something investors and buyers should keep a keen eye on. 

Remote working here to Stay 

According to a study conducted by Deloitte, working from home (WFH) is here to stay. In a survey conducted in the first week of January of this year, 98% of companies' chief finance officers surveyed foresee that flexible and home working to be part of the business in the long term. This is expected to lead to 500% more people working from home or flexibly by 2025 compared with 2020.  

 If there is a further increase in WFH, this would mean staff working from home all or at least most of the time will be in a position to live outside of the traditional commuter areas where properties are more affordable, especially for those with growing families. Ultimately, this means that people are not clustered around the key commuter belts, making for more even population and wealth distribution. This could be a significant advantage for the midlands given that house prices are more affordable in that part of the country.

HS2 – London to Birmingham will only take 45 mins

 Phase 1 of the HS2 is set to be completed by 2028, and this will reduce the journey time from London to Birmingham by more than half. According to midlands connect the East Midlands Hub station at Toton will be one of the most connected stations in the UK. 

East-Midlands will be a hub to major centres in the region including Nottingham, Derby, Leicester and East Midlands Airport. This will make the midlands exceptionally well connected with London and the north, as illustrated in the HS2 map below. This will only mean that these areas of midlands become more desirable as people look to move here due to increased remote working and more affordable house prices. 

Source:HS2

Source:HS2

Levelling Up Agenda

When the conservative government led by Boris Johnson came into power in 2019, they came to power on the agenda of "Getting Brexit Done" and "Levelling up". The first one is pretty straightforward or at least sounds straightforward, but what is levelling up?

The government announced in March 2020 that it would be investing record amounts in Britain's roads, railways, broadband, housing and research – over the next five years the public sector will invest more than half a trillion pounds (£640bn) and by the end of the Parliament. Much of this investment will be in the north and the midlands according to the centre for cities. This would mean good news for the region as infrastructure investment in good broadband connectivity and roads will lead to further desirability.

There are Signs Already

According to data published by the mortgage broker Trussle West Midlands and East Midlands had the most significant increase in mortgage approvals in 2020. Mortgage approvals were up by 244% and 214% respectively. Therefore, suggesting that there is significantly higher demand for homes in the Midlands than anywhere else in the country than 2019, and with reasons set out above this demand with being fuelled further. 

We believe that if remote working is here to stay as analysts predict, then greater connectivity coupled with more affordable house prices and significant government infrastructure expenditure could make midlands very desirable place to live in over the coming years. Of course, this is not a guarantee, but there are all the ingredients to make this part, which was once the industrial heart of England into a great place to live and invest.