Midlands Engine is very positive for property development – Together research
– Nearly six out of 10 developers say Midlands Engine has boosted plans
– Residential houses and flats offer the best opportunities over the next two years
– But one in three are worried about access to finance
Property developers say the Midlands Engine is a shot in the arm for the region’s economy, according to new research.
In a study by specialist finance company Together, they said the initiative has had a ‘very positive’ impact on their plans to invest across the region.
The strong support is tipped to translate into development activity – with more than half (51%) of property developers saying they will substantially increase investment in the Midlands, the research found.
Andrew Charnley, head of corporate relationships at Together, said: “The Midlands Engine has clearly struck a chord with property developers who are very positive about the initiative and the huge potential it offers for the region, which is already home to around 800,000 large and small businesses.
“Their bullishness is more than just warm words with more than half saying they’re planning to increase investment across the region substantially over the next two years.
“However, our research uncovered challenges in turning their optimism into reality in the shape of suitable sites and conditions across the property market. Access to finance is also important and is an area where we are determined to play our part by taking a flexible approach to meeting developers’ funding requirements and working to meet tough deadlines.”
Together’s research amongst a panel of the region’s developers showed the focus of future investment was heavily on residential schemes – 83% said the biggest opportunities are in houses, whilst 80% identified flats as offering the best returns.
However, the report found commercial property schemes were also considered to offer opportunities. Around 42% of respondents said they will look for semi-commercial properties while 40% believe hotels will be successful. Offices (27%), retail units and restaurants (28%) were less popular but still seen as attractive investments.
However, the positivity generated by the Midlands Engine – a coalition of councils, combined authorities, local enterprise partnerships (LEPs), universities and businesses across the region – will face property development challenges.
Nearly half of developers (48%) are concerned about the property market downturn and 41% worry about a lack of available sites in the Midlands.
Nearly two-fifths (38%) admitted having reservations about the ongoing Brexit uncertainty.
Around a third (33%) said that a lack of access to finance could hamper the Midlands Engine initiative which includes a focus on unlocking housing growth and building at least 600,000** new homes over 15 years as one of its aims.
