New Midlands initiative has positive impact for developers
Property developers believe that the Midlands Engine initiative has had a positive impact on their plans to invest in the region, specialist lender Together has found.
The Midlands Engine is a government initiative made of local authorities and enterprise partnerships across the Midlands which aims to grow the region to present it as a ‘compelling and competitive offer’.
As a result more than half (51%) of property developers saying they will substantially increase investment in the Midlands.
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.”
Some 83% of developers said the biggest opportunities are in houses, whilst 80% identified flats as offering the best returns.
Around 42% of developers said they will look for semi-commercial properties whilst 40% believe hotels will be successful.
Nearly half of developers (48%) are concerned about the property market downturn and 41% worry about a lack of available sites in the Midlands.
In addition, 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.