Reactions to the Government’s recently announced levelling up plans have been mixed – but that doesn’t mean property investors should disregard the lucrative potential of the project.
On the more sceptical end of the spectrum, we have groups like the Centre for Cities think tank, which recently reacted to the levelling up white paper by pointing out that the plans don’t have enough of a focus on the future beyond 2030 and their targets aren’t always concrete.
On the other hand, the government published a press release at the end of March announcing that levelling up funding is already rescuing pubs up and down the country that would otherwise be shut down.
This comparison might sound a little bit facetious –we all love a good pub, but there’s obviously a lot more at stake here.
Having said that, this successful funding of rural pubs via the Community Ownership Fund is a reminder that levelling up isn’t just speculative – it’s a strategy backed by tangible funds.
As such, investors don’t necessarily need to get bogged down over the question of whether or not the new plans will solve decades of social and economic division – instead, it’s worth thinking about the more immediate and practical question of where funding is being allocated, how it’s being used, and what this might mean from property values in overlooked areas.
By looking at the specifics of the government’s funding allocations, property investors will get a much better sense of what levelling up looks like for a given region and its local economy.
After all, the white paper can feel vague when it talks about its various “levelling up missions,” which include factors like living standards and transport infrastructure. Improving these things are are important and commendable, but – as targets – they sound a little woolly.
Looking at these goals in the context of their funding, however, tells a very different – and much more appealing – story.
Take the government’s levelling up summary for the North West, for example, which goes into some detail regarding an initial £232m investment courtesy of the Levelling Up Fund, alongside a further £486m via the Towns Fund.
In this light, the paper’s reference to transport infrastructure crystallises into concrete examples – in Manchester, for instance, the paper points to investments in the city’s “next generation Metrolink tram-train vehicles,” alongside future investments in improved walking, cycling, and ferry routes in places like Liverpool.
Paying attention to funding allocations and the specific areas they’ll impact – Manchester being set to receive some of the Levelling Up Fund, for example, or Preston numbering among 20 North-West recipients of the Towns Fund – is clearly a more useful and practical way for investors to assess the property landscape, basing their decisions on tangible government-led investments.
Regeneration, remediation, and brownfield sites
Of course, having paid attention to where the funds are being allocated, it’s also worth getting a sense of how those funds are going to be used.
Towards the end of March, the government released a prospectus detailing the themes of the Levelling Up Fund – including “regeneration and town centre investment,” which entails acquiring and regenerating brownfield sites and updating current infrastructure.
Regenerating brownfield land, perhaps by turning disused commercial buildings into new homes, for example, is a hugely important project – and one which is adding vibrancy, new life, and much-needed homes to dozens of local councils across the UK.
Obviously, this concrete emphasis on regeneration has huge implications for property investors.
Overlooked or underappreciated areas have enormous scope for growth in both value and rental appeal, whether in Northern cities like Manchester or towns like Preston, and this clear, well-funded route towards regeneration is a clear sign that a lot of potential is about to be unlocked.
Among the weeds
Do these investments mean that levelling up, as an agenda, is likely to succeed?
Not according to Professor Andy Westwood of the University of Manchester, who recently suggested that while the country could indeed see a “10 to 20 year return” on levelling up investments, the plans are still lacking in cohesion and controlled too much from the centre.
But the key, for property investors, is not to get lost in the weeds over debates around complex issues like devolution. Levelling up isn’t a simple task or a flash in the pan, but a long and complicated undertaking.
Instead, it’s important to understand that even partial or localised successes in levelling up, driven by the right funding and with an eye to regeneration and rejuvenation, may very well lead to strong returns for investors who recognise which way the wind is blowing.