HS2 - is the Midlands likely to benefit more than anywhere else?

As debate rages over levelling up and a north/south property divide, in the first of a new monthly column, property expert Jonathan Rolande suggests why the Midlands is on track to win big in 2022. 

Even though we are only a couple of weeks into 2022 there have already been hundreds of stories across the national media predicting what we can expect in the 12 months ahead.

Many have rightly focused on the increasing concerns about the north-south divide within the property market and whether that gap is slowly closing.

And while debate rages over levelling up, it’s becoming increasingly clear there is likely to be one region who will come out on top - the Midlands. 

According to reports, the West Midlands - which is home to Birmingham - is expected to see 7% growth in house prices, which is around 2% above the national average.  And one of the main factors driving the renewed optimism is HS2. 

Ever since this transport revolution was announced, my inbox has been full of messages from people asking if it is a good idea to be investing in property along the proposed HS2 route. Right now the hardest part of that to answer is just where the route will be, with seemingly never-ending speculation about changes to where the line will, and won't eventually pass through.

But wherever its final destination ends up being, HS2 looks on track to deliver a surge in the value of houses close to it. Of course, until built, buyers will be hesitant so we might see a short time reduction in price and saleability. But once up and running, I believe prices could increase by as much as 10%.

Driving this is the fact that commuting is likely to transform as we move out of the pandemic. We are heading for a completely new commuter belt which will see increasing numbers of people traveling from London to Birmingham and even from London to Manchester. It is already the case that many commuters making these journeys find faster travel times than those travelling from say Brighton and other parts of the South of England. So HS2 - if delivered in the way promised - is only likely to accelerate this shift.

For that reason investing now is seen by many as a good idea. But a more sensible approach might be to adopt a ten-year plan. The increase in northern house prices is likely to create a decade of opportunity and investors will be looking for the pot of gold at the end of the HS2 line. 

Expect growth to mirror general market conditions and then start to accelerate even more around 2025 and beyond. Plus, if the government’s proposed levelling up agenda delivers on its promises, then the opportunities for investors could well extend far beyond the next 10 years. 

As for sellers, they could be wise to hold their nerve as long as they can. This is such a long-term project that selling now, although tempting, could mean they don’t maximise the potential benefits the new commuter line (wherever it goes) will bring. Wise investors are planning to ride out the construction phase to benefit from the completed line uplift. Then they will make their move.

Investors are currently looking at the proposed new commuter line and trying to work out where the best areas will be to put their money.  One area which many are focusing on is Solihull. There is a chance this region is suddenly going to become very, very attractive to people in London, because there are plans for it to be the first stop outside of the capital on the new railway line.

This could see many people who might ordinarily choose to live in the south east opt instead for the Midlands and commute from there. But the benefits of HS2 will stretch well beyond the Midlands. It is estimated the completion of HS2 could create nearly 500,000 jobs in Northern cities and towns – and Liverpool and Manchester will see increases in economic growth.

This, in turn, is likely to push up already rising house prices right across both cities. I’d predict an eventual surge in city centre apartments in Manchester and Liverpool targeting those commuting to London for work.

*Jonathan Rolande is a director of House Buy Fast and a founder of the National Association of Property Buyers. You can read him here every month.