Mixed Signals About Boris' Rail Plans Worry Regional Property Markets
Not yet a week into his premiership, and Boris Johnson is already causing a stir in regional property markets. But the controversy is not about Brexit, it is about trains.
Johnson, who became prime minister on Wednesday last week, used a speech in Manchester and another in the West Midlands to sow hope, anxiety and expectation about his approach to regional policy. New rail developments were the focus.
In Manchester, Johnson confirmed plans to support a new Trans-Pennine rail route between Manchester and Leeds.
"I want to be the PM who does with Northern Powerhouse Rail what we did with Crossrail in London," he said. "It will be up to local people and us to come to an agreement on the exact proposal they want — but I have tasked officials to accelerate their work on these plans so that we are ready to do a deal in the autumn," he said.
At the heart of this will be a commitment to deliver Northern Powerhouse Rail. The first step will be the Manchester to Leeds route, with detailed plans published this autumn, following the review into HS2.
In Manchester enthusiasm was muted by the recognition that George Osborne said much the same about Trans-Pennine rail in his 2014 speech launching the Northern Powerhouse initative. Five years later and even some of the simpler rail-capacity initiatives have stalled, such as additional platforms at Manchester Piccadilly as part of the Northern Hub plan.
But there was also a recognition that some hope was better than no hope at all that the project could massively boost real estate in the North.
“Yes, we have heard this before," Barton Willmore partner Dan Mitchell told Bisnow. "But the renewed announcement is most welcome at a time when there is underinvestment in northern transport. An improved east-west link would provide an obvious boost to the Northern economy. This needs to be focused on Manchester to Leeds, at least initially, as a new northern backbone. The complications come when other Northern cities also seek to link in, then delivery becomes challenging.
“Improved connectivity would further stimulate the office and creative sectors centred around Piccadilly and Leeds’ stations. Linked to HS2, both have massive potential for growth, with tall buildings creating a new skyline. Mayfield already provides a 10-year vision, regenerating an underused part of Manchester city centre. Southbank in Leeds provides a similar significant opportunity, benefitting from Channel 4’s relocation. Connecting both together will create a new northern super hub.”
Birmingham vs. Boris?
Whilst Manchester cautiously welcomed Johnson's thoughts on the rail network, in Birmingham the reaction was more guarded.
During a visit to Harborne, Johnson spoke about the cost of the HS2 high speed rail line linking London to Birmingham and beyond, suggesting the cost could rise above £100B. The claim came just days after the chairman of HS2 conceded the cost might be as high as £85B. Both figures are considerably in excess of the £56B anticipated until now, and will make the cost-benefit analysis increasingly fragile.
Before his appointment as prime minister Johnson appointed Douglas Oakervee to review the HS2 project amidst speculation it was to be ditched. Johnson has now appointed Andrew Gilligan, a prominent critic of HS2, as his transport advisor.
"As prime minister of a great economy I’d have to think very, very carefully about instantly cancelling a huge national infrastructure project," Johnson said during the Conservative leadership election, according to a report by the Birmingham Post. "I’d have to look very carefully at the business case."
