Earlier this year, the government revealed more details on its proposed ‘investment zones’ across the UK. How are plans progressing so far?
The investment zones programme was first outlined in pledges by former prime minister Liz Truss, and earlier this year the proposal was firmed up by Chancellor Jeremy Hunt as he set out the 12 broad areas of the UK where local authorities could apply for £80m of funding.
As part of the government’s ongoing levelling up agenda, this funding is to be used over a five-year period towards both spending and tax incentives, in order to boost productivity and encourage growth in these areas. This is expected to lead to large-scale job creation and skill development in these areas.
The priority, according to the government, is on developing and expanding existing technology clusters, and zones must have focus on one or more of the following sectors: digital and tech, green industries, life sciences, advanced manufacturing, and creative industries.
Tax incentives on offer in investment zones include stamp duty relief, 100% business rates relief, enhanced capital allowances, enhanced structures and buildings allowance, and lower National Insurance contributions from employers.
Two northern investment zones announced
So far, two investment zones – both located in the north of England – have been revealed. The first is the South Yorkshire Investment Zone, and the second is the Liverpool Investment Zone.
The UK’s first investment zone is set to focus on advanced manufacturing, with the creation of 8,000 new jobs by 2030 and £1.2bn of investment expected to benefit the communities of Sheffield, Rotherham, Doncaster and Barnsley and surrounding areas.
As Michael Gove, secretary of state for Levelling Up, Housing and Communities, said in a statement, the creation of this zone is a “significant moment for South Yorkshire”, and will help level up the region, “promoting growth and providing opportunities so people can thrive”.
Aviation research will be a major focus of investment, with Boeing planning to work with industry partners, Spirit AeroSystems and Loop Technology at the University of Sheffield Advanced Manufacturing Research Centre (AMRC) Factory 2050 in Sheffield Business Park.
The second of the UK’s investment zones so far was named as Liverpool after the city’s successful bid. Life sciences will be the primary focus, with around 4,000 new jobs set to be unlocked in Liverpool, Runcorn, St Helen’s, Maghull and Prescot over the next five years.
The £80m in government funding is expected to go towards boosting skills and infrastructure in the zone, as well as towards tax reliefs, with the intention of making Liverpool a “pharmaceutical production superpower”. More than £300m of private funding is also in the pipeline.
Steve Rotheram, Mayor of the Liverpool City Region, said: “Our area is fortunate to play home to world-leading clusters in life science research and innovation, which support thousands of secure, well-paid jobs and training opportunities for local people.
“I am incredibly proud of what our region has achieved in the sector – but this is just a down payment on my future ambitions. I want us to go even further and establish our region at the forefront of UK science and innovation.”
Investing in the zones
For property investors, honing in on an area that is set to benefit from investment and regeneration is an extremely popular strategy for those wanting to maximise their potential capital gains. House prices in regeneration zones tend to perform significantly better than in other areas.
As such, many investors will be keeping an eye on upcoming announcements regarding confirmed UK investment zones, and these areas are all set to benefit from a boost in the number of new homes being built there in order to support the growth.
Alongside the investment zones, there will be a new “supersquad” of expert planners, who can use £13m of funding to help unblock new housing and infrastructure, “to help provide high quality homes which complement the high-quality jobs that are being created”.
South Yorkshire and Liverpool are already popular property investment destinations thanks to their affordable property prices, high rental yields and good level of tenant demand, and the outlook is set to improve further as the investment zones progress.