In recent years, more and more students, young entrepreneurs and even businesses are beginning to move towards northern cities in the UK, in search of factors such as employment opportunity and better standards of living. It seems that the ‘lightning in a bottle’ atmosphere of creative energy has somewhat dissipated in the capital, with similar opportunity offered in cities such as Liverpool and Manchester.
So, what is this phenomenon, what is the reasoning behind it, and what does it mean for the prospective buy-to-let investor going forward? Read on to find out.
What is ‘North-Shoring’?
North-Shoring is the process of business and entrepreneurs moving to northern cities in the UK in order to save money. The spread of work is benefiting cities in the north as they receive regeneration, and the increase in opportunity is beneficial for the UK economy as a whole, as they retain workers in the country.
Working in London demands a much higher wage in order to accommodate the heightened costs of living. While it is true that certain opportunities and networks are only available in London, many in the equivalent job can get a much better apartment or flat in another area, with room for savings. In Liverpool, as the city’s tech hub thrives, high-quality luxury apartment developments are garnering interest from both potential tenants looking to move, and investors looking to secure themselves in the future. Property investment company RW Invest, for example, is offering an exciting development in the Baltic Triangle area of Liverpool, on the doorstep of the flourishing creative and tech-driven hub. Their One Baltic Square build will feature rooftop gardens, luxury interiors and water features.
As expected, not all companies can simply uproot their businesses and shift without consequence. Channel 4 is the next of the major television companies to move the power balance from the capital, following the lead of the BBC and ITV studios in Manchester’s MediaCityUK. However, they haven’t received the feedback from staff that perhaps they might have hoped for, as it is estimated that 80-90% of the London-based workforce will not move to the new HQ in London, instead seeking alternative employment. While locals are disappointed to hear that their city is not enticing, the new jobs available will entice people to the area regardless.
Many who have taken the leap and decided to move away from London have found a much more affordable and better quality of life. On the subject of Channel 4 in particular, Susie Field, head of production at an independent TV company, said that “there needs to be a cultural shift in the way people think in London as it is no longer affordable”.
For large scale businesses such as Channel 4, that have a much larger number of employees with different social and living situations, the ‘hub and spoke’ business model is being adopted. This allows said business to retain a basis of power and influence in London, while also dipping their toes in a burgeoning northern city with a separate office.
What does it mean for the property investor?
The scales of influence are beginning to balance more rapidly than ever before away from London, and a range of different cities in the UK are becoming desirable locations to live, with rivalling amenities. As a result, it is vital for potential investors, particularly those looking to invest in a city, to consider the best possible area to expand their portfolio.
Investment opportunities in and around the London area seem to mirror the attitudes felt by those moving away from the capital in search of greener pastures. Not only is it more affordable to invest in a property in, for example, Liverpool or Manchester, but house prices are much lower, and the returns are also more fruitful.
Additionally, while it has been shown that the ‘Brexit’ fallout caused by the referendum should ultimately not affect the property market, buyers in London are cautious, and it feels as though the shadow of negativity surrounding the country’s current political situation looms over the capital more than any other city. Many buyers and tenants are sat waiting for something better to come their way, all while the surrounding northern areas aren’t hesitating.