Tax expert David Hannah claims the government’s newly announced plans for 12 high-growth investment zones has already caused property prices’ explosions across the North of England and the Midlands and attracting BTL investment.

The government plans to give £80 million of funding over the next five years to ‘supercharge’ the North of England boosting local infrastructure and skills around research institutions and universities. The growth areas will also help encourage sectors such as technology, artificial intelligence and creative industries normally based in London.

Across the UK there are currently around 188,182 tech firms of which 44,831 are based in the capital but with increasing rental costs rising by 9.1 per cent which may be too much of an issue for employees to stay in the capital;  many are expected to move to the North escaping ever increasing living and associated costs.

David Hannah says: “It is no surprise that renters and homeowners are fleeing from the South, especially with many choosing to move further North due to the overwhelmingly cheaper cost of housing. As of March 2023, the Office of National Statistics reported that the North East still has the lowest average house prices in the UK at £163,000, while London has the highest at £534,000.

“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 per cent rise in the East Midlands (from £200m to £265m) to a massive 80 per cent rise in the North East (from £50m to £90m). More than a third of tenants from London moved to the Midlands or North, up from 27 per cent in 2019 and above the 13 per cent of homeowners moving to the same regions.”

The tax expert says it seems that the government is intent on evenly distributing funding across the UK and the new investment zones will attract businesses and increase employment levels in these regions and the inevitable higher property prices.  

Hannah continues: "Not to mention providing more job opportunities for those who are currently unemployed causing a rise in wages and potential property buyers. The Chancellor did outline employment as a priority in the announcement and specifically a measure of having apprenticeships available in the skilled trades for over 50-year-olds. Naturally, this could positively affect the chronic undersupply of properties in the housing market if we have more skilled workers that are able to work in the construction sector.