Spotlight: 

The Impact of HS2 on Development

The Impact of  HS2 on Development
The Impact of HS2 on Development

25 November 2015, by Susan Emmett

We look at the impact of HS2 on regeneration and development.

■  Impetus for change. The initial impact of HS2 will be on Birmingham. The city is already changing fast and undergoing tremendous regeneration and development. Large employers are expanding and, in turn, not only generating more jobs but also a bigger number of higher skilled positions. These changes have not gone unnoticed by investors, many of which are looking beyond London for new opportunities.

 

The coming of HS2 enables the city to build on the momentum. Increased connectivity between places where synergies exist increases the potential for trade. Faster train journeys and increased capacity also have the potential to prompt the reorganisation of economic activity between places with companies moving or expanding to more efficient locations.

■  Demand for Birmingham. While the West Midlands was hit worse by the last recession than many other regions, the scope for catch-up is strong. Relatively low employment and housing costs compared with those of London will support expansion. We estimate that moving a position from central London to the West Midlands could save £8,000 pa in office property costs and £10,000 pa in staff costs. Linking Birmingham’s growing financial district and tech sector, including the flourishing creative enterprises in Digbeth, with London via HS2 adds to the attraction for both occupiers and investors enabling further growth.

■  Housing. Growth will put pressure on its already stressed housing market. Birmingham needs 89,000 new homes between 2011 and 2031, the equivalent of 4,450 a year. But only 1,810 homes were added to the mix in the year to March 2015, leaving a shortfall of 2,640 homes. If supply remains restricted, the increased demand for homes will push up house prices. Over time, the gradual influx of wealth both in the shape of commuters’ salaries and a greater number of better paid corporate employees in Birmingham means that the top end of Solihull and Birmingham are likely to outperform the local market.

■  Regeneration around Curzon Street. The arrival of HS2 in a newly constructed station will encourage the growth of the city centre eastwards. By instigating physical changes in the surrounding areas and bringing sites forward, the line effectively expands the areas suitable for development. The new station is likely to act as a catalyst for development in Eastside and the eastern side of the City Centre Core. Improved connectivity enhances the potential to increase densities.

 The potential for Manchester. Plans for HS2 provide additional stimulus to redevelop areas around Manchester Piccadilly station, particularly the sites which missed out on regeneration in the last economic cycle. However, given the lengthy timeframe, it is difficult to disentangle how much development will be brought forward directly as a result of HS2 from what would have happened anyway.

 London Terminus. Euston station is the planned terminus station for HS2 in London, providing scope for redevelopment around the station. There is the potential to provide both quality public space and commercial, residential and retail provision. While there may be difficulties to overcome with development around the station, it is essential that HS2 terminates in central London.

Articles from Spotlight: The Impact of HS2 on Development

What Effect Will HS2 Have?

25 November 2015

What Effect Will HS2 Have?

Connectivity will stimulate further economic growth, supported by the devolution deal and Government investment.

The Potential For Growth

25 November 2015

The Potential For Growth

Birmingham is already changing. The new high-speed link creates synergies between businesses at both ends of the line.

Changing Shape Of Birmingham

25 November 2015

Changing Shape Of Birmingham

Creating major development zones around Curzon and UK Central provides opportunities for investment.

Building On Phase Two

25 November 2015

Building On Phase Two

The second leg of the HS2 project could act as a catalyst for further regeneration in Manchester and Leeds.

Outlook

25 November 2015

Outlook

The biggest impact of the HS2 project is it provides the impetus for change.

 
 

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