The HS2 train will connect London to other regional cities like never before, encouraging businesses and investors to look northward.
- The completion of the HS2 line will encourage large businesses to expand or move to well-connected northern cities
- ‘Northern Powerhouse’ cities such as Manchester and Birmingham will most benefit from the high-speed line
- Manchester’s economic performance is expected to be higher than the national average over the next five years
The impending arrival of the HS2 line is causing cities outside of London to build on economic momentum and attract investors away from the capital.
A combination of rising property costs and higher salaries for staff could lead to large businesses relocating from London, encouraged further by greater connectivity between major cities once the HS2 line is complete.
By linking key cities such as Birmingham and Manchester once the full network is finished, alongside other local rail and public transport upgrades, the HS2 is an important element in bringing the ‘Northern Powerhouse’ to fruition.
In Manchester, strong political leadership and improving economy are reflected in development plans around the city. There are currently 2,500 new homes under construction in the city centre and Salford, with over 1 million sq ft of new office space planned over the next two years.
In his spending review, Chancellor George Osborne said the HS2 line was six years ahead of schedule: “Bringing forward this part of the HS2 route by six years is a massive step in the right direction for the Northern Powerhouse, where high-speed rail will play a big role in connecting up the entire region with the rest of the country.”
With record housing and office rents in London, Manchester and Birmingham could draw businesses and entrepreneurs northward. The estimated cost of saving per employee moving or expanding from central London is £10,000 per person per year.
The redevelopment around Piccadilly train station to accommodate the HS2 line will potentially provide 625,000 sq metres of commercial floor space, 100,000 sq metres of retail and leisure facilities and over 6,500 homes.
However the city is only building half of the 9,654 homes it needs every year and there is still a lacking supply of purpose-built student accommodation. With Oxford Economics expecting Manchester’s economic growth to be above the national average for the next five years, investors are recommended to enter the market before the HS2 line is completed and prices increase exponentially.