The ‘left-behind’ towns across England and Wales earmarked for £20 million endowment-style funds each under the Government’s Long-Term Plan for Towns, have outperformed the property market for commercial transactions, according to a study by Search Acumen, the property data insight and technology provider.
The Prime Minister and the Department for Levelling Up, Housing and Communities (DLUHC) have announced a list of 55 ‘overlooked’ towns across England, Wales and Scotland in which more funding will be allocated for local priorities such as reviving high streets.
However, Search Acumen’s analysis of data for England and Wales indicates that commercial property transactions in these left-behind towns has significantly outpaced the wider market.
Its findings show at the height of the property boom in 2021, the total amount spent on commercial property transactions in 48 ‘left-behind’ towns across England and Wales[1] totalled £3.3bn, up by 23% from the £2.7bn seen in 2017. This growth rate was almost four times higher than seen across the rest of the market over the same period, where spending on commercial transactions was up 6% from £101bn to £107bn.
Even allowing for the slowdown during 2022, commercial spending on property transactions in left-behind towns was just 3% down on 2017 levels, compared to a 19% fall across the rest of the market.
Graph 1: Left-behind towns outperform the market for growing investment in commercial property deals
Skegness leads the field for attracting more spending on commercial property transactions
Skegness was the best performing left-behind town from 2017 to 2022, with a four-fold increase in the total value of commercial property transactions from £26m to £137m last year.
Darlaston (201%), Worksop (166%) and Kirkby (100%) all enjoyed triple-digit rises in the annual value of commercial property transactions over the same period.
Search Acumen’s analysis also shows that over the last five years, left-behind towns across England and Wales have seen their share of spending on commercial property transactions steadily increase. In 2017, £2.60 in every £100 spent on non-residential transactions across England and Wales was spent in the 48 towns earmarked for Government support.
That figure rose to £3.10 in 2022 and the latest figures for 2023 show £3.50 in every £100 of spending on commercial transactions of property across the whole of England and Wales is spent in left-behind towns.
Graph 2: Left-behind towns’ share of spending on commercial transactions across England and Wales
Regional divides
However, at a regional level there is a noticeable divide in the fortunes of left-behind towns over the last five years. Those based in the Midlands have seen annual commercial property market activity grow significantly by value, with the East Midlands leading on 38% growth and the West Midlands recording 6% growth.
In contrast, Northern regions have seen a 13-17% fall in the annual value of commercial property transactions, while left-behind towns in the South West have suffered a 27% drop in commercial spending since 2017.
Graph 3: Regions are divided over annual spending on commercial property transactions from 2017-2022
Andy Sommerville, Director of Search Acumen, commented:
“Our analysis shows that even so-called ‘left-behind’ towns are a mixed bag that are affected by regional disparities and inequalities. While the left-behind towns in the South-West of England have seen commercial property market activity take a nosedive since 2017, those in the East and West Midlands have defied the gloom to record impressive growth in the value of investments by commercial buyers.
News of additional public funds over the next decade for neglected areas will help build on this momentum and help towns which have stagnated to turn the tide. A lot of talk in the property market focuses on the North-South divide, but as the Midlands benefits from regional industrial development, it’s important that central and local government take practical steps to improve the outlook for businesses and communities across the country.
The experience of recent years suggests central decision making and public spending alone cannot adequately level up the country. Policymakers must choose their investments carefully and create the conditions for local businesses to flourish so that further regeneration levers can be pulled across the private sector.
With the scaling down of HS2’s ambitions and a General Election looming, announcements about Government spending commitments over the next 12-18 months may have to be taken with a pinch of salt. That said, it will be incumbent on the next Government to double down on progress where it exists and do more to boost local communities for the long-term where they have been left behind.”
[1] There were 55 towns announced in total by the Prime Minister and the Department for Levelling Up, Housing and Communities (DLUHC). HM Land Registry Price Paid Data only extends to England and Wales and therefore Search Acumen’s analysis focuses on the 48 towns within this remit for the purposes of comparisons.
This article was submitted to be published by Search Acumen as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
