Generic Manchester Images. Credit Place North West

Investors in the North West and Yorkshire appear to be forecasting sunny skies, according to data from Handelsbanken. Credit: PNW

The Subplot

The Subplot | Investors’ brains, Teesworks, Liverpool

Welcome to The Subplot, your regular slice of commentary on the business and property market from across the North of England and North Wales.


  • They’re optimists: unique data provides a glimpse inside the minds of North West and Yorkshire investors. It’s mostly sunshine in there
  • Elevator pitch: your weekly rundown of who and what is going up, and who is heading the other way


Northern landlords want to get spending

A unique regional drilldown into the thinking of North West and Yorkshire landlords shows a lot of optimism and opportunistic spending as late 2023 promises to deliver distress-priced bargains.

Core inflation is still rising, up from 6.2% to 6.8%, according to yesterday’s ONS figures. That means interest rates will probably have to rise above 5%. None of this is good. So will the North’s landlords sit on their hands, or is this a moment to seize the day, and buy? Unique data from banking company Handelsbanken, shared exclusively with Subplot, shows that despite economic uncertainty the North’s landlords are in a confident mood.

They really want to buy

Six out of 10 North West investors are set to acquire more properties in the year ahead, and five out of 10 in the North West think valuations will rebound fast and that their portfolio is going to grow in value by 20%. On both sides of the Pennines, diversification is the key – and buying in the North West is a top aim for both locals, and the cousins from Yorkshire. But buying in Yorkshire is not too high on the list.

Who are we talking about

The survey questioned 17 mid-sized investors based in the North West, and another 17 in Yorkshire & The Humber. It’s a small sample, but a significant one: eight had portfolios of between £20m and £50m, two of more than £50m, and 11 were in the £5m to £10m category. They were divided roughly 50:50 residential and commercial, and within commercial about one third each are into offices, retail, and sheds. Between them, this select sample represent the backbone of the regional markets in question.

Valuations to rebound fast

Every single North West and Yorkshire respondent expected the value of their portfolio to increase over the next 12 months. Nationally 39% predicted it will grow by 20% or more, and in the super-confident North West, some 47% thought they were in for a mighty portfolio boost. In Yorkshire, just 24% thought the same – and if you like cliches about Yorkshire pessimism, then fill your boots. Yorkshire’s majority thought portfolios would, inflation adjusted, decline in value, growing by just 5%. This was a view shared by a few in the North West, though the mega-optimists remained dominant.

Come out swinging

Commercial landlords and investors were extremely keen to buy more. In the North West 59% thought they would expand their commercial portfolio “significantly” in the next 12 months, another 24% thought “slightly.” In Yorkshire, ever looking for the sunny side, they planned to do a lot more buying despite having a generally rather modest view of valuations: the numbers an astonishing 76% “significantly” expanding and 18% “slightly”. For the record, the number of Yorkshire investors who thought their residential portfolio would grow significantly was a cautious 18%, and in the North West a more upbeat 35%.

They love student housing

Diversification – regionally and by sector – was the main reason. Student housing was amazingly popular on both sides of the hills – about 75% planned to increase their exposure. Surprisingly, about half wanted to increase their exposure to offices and retail – so either bargain hunters, or they know something the rest of us don’t. Leisure, healthcare. and the former star of real estate, sheds, were all a bit less popular but had their fans.

Bargain hunting

According to James Sproule, UK chief economist at Handelsbanken, investors are getting ready for a bargain-hunting spending spree in autumn, as distress in the economy (at last) forces property sales. “Residential prices will fall 7%-8% in nominal terms, commercial property prices slightly more, and we’re maybe halfway through that decline right now,” he tells Subplot. “Many of our landlords can see good bargains beginning to appear later this year, and they are organising themselves to step in smartly when they see opportunities from September onwards.”

However, don’t forget this

Two footnotes. First, tenant distress is a real problem, and massively more so in Yorkshire than the North West if the volume of overdue or late payments is the measure. Just 18% of North West landlords confessed to late rental payments, compared to 64% in Yorkshire. Second, investing in greener, cleaner buildings: local landlords are overwhelmingly not planning to spend a lot, mostly far less than £200,000 this year across their portfolios. One Yorkshire developer had no idea it was no longer legal to let buildings with an EPC rating below E.


Going up, or going down? This week’s movers

A long-awaited Liverpool scheme wins significant funding; whilst clarity could be ready to descend on the increasingly byzantine Teesworks scheme. Going up!

Mersey money

Merseyside Pension Fund’s Catalyst Fund has agreed to loan £60m to Legacie Developments to redevelop Heaps Rice Mill, Liverpool, into 620 apartments, as well as an underground spa and museum. The development is touted with a capital value of £140m, and nobody has a bad word to say about the site.

The deal is good news for a troubled site that has stood empty for 18 years, and survived several ill-starred attempts at redevelopment. But the better news is that the fairly picky Merseyside Pension Fund is ramping up its local game. It has long aspired to a role in the backyard similar to that of Greater Manchester Pension Fund – heartening to see this happening.

Teesworks clarity

After much back-and-forth, the government has reluctantly agreed to a formal audit inquiry of the Teesworks development in Redcar. In a letter to Tees Valley Mayor Ben Houchen, secretary of state Michael Gove wrote that his department had not seen any evidence of wrongdoing, but that the inquiry was to address the mounting allegations of corruption. For the investigation, Gove has opted to ditch the National Audit Office in favour of an independent panel of his choosing.

The issue resolves around 4,500 acres of former steel works and neighbouring land, at first in the hands of the South Tees Development Corporation. The site didn’t see much development action and, in an effort to ginger things up, was announced as a freeport in 2021. The questions are: how did so much of it end up under the control of local developer DCS Industrial, were the terms wise, and have state aid/subsidy rules been breached? There are also many itchy side issues to complicate the picture, which is a nightmare to untangle: it’s all well explained here.

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