Member Article

Year of more change ahead

The close of 2013 has seen the introduction of several proposals that will, if approved, have a dramatic beneficial impact on the economy of the north east and therefore that of the property sector.

The seven local councils in the north east of England comprising Durham, Tyne & Wear and Northumberland have proposed a Combined Authority (CA) to deal with strategic transport, economic development and job creation.

The government ends consultation on January 2, 2014. If a strong positive response is received, it is likely that the CA will be established by spring 2014 and chaired by Councillor Simon Henig, leader of Durham County Council.

This will be hugely positive for the region especially if the councils and the private sector collaborate to create a marketing vehicle for the region to attract inward investors and work in partnership with UKTI.

The seven local councils and the North East Local Enterprise Partnership have also collaborated to present a submission to secure €500m for infrastructure funding and the establishment of a JESSICA or North East Urban Fund, with the aim of supporting development with funding.

This will boost the £50m or so that the NELEP Investment Fund is lending to kick start both development under the Growing Places Fund and job creation under the Regional Growth Fund. We need to find a way of using the Fund for lending to grow viable development in the region so that the monies can have a big impact.

The joint approach from the NELEP and the seven councils has applied to the creation of a North East Strategic Economic Plan, which if approved will form the basis from which the CA and NELEP will operate.

I think that this plan will have many synergies with the Adonis Economic Review published by the NELEP earlier in 2013.

If these three initiatives happen by spring 2014 I foresee a highly competitive, expanding economy in the region that will be beneficial to the property and construction sectors.

While we are doing reasonably well as a region, we still need to do better and the NELEP commissioning a report to identify the priorities for infrastructure spending will help to focus delivery of physical regeneration for the region.

We have the established City Deal for Newcastle and Gateshead and the emerging City Deal for Sunderland and South Tyneside.

This allows the councils to borrow on the potential business rates and invest in the region’s infrastructure and development.

Doing so in partnership with the private sector will be a significant opportunity for the region to provide employment space at a time when shortages in industrial units and city centre offices are becoming apparent.

The property sector has been in a stasis for much of 2013 because of low demand. I am optimistic that we shall see a change in 2014 with growing demand and greater confidence from the property development and financial institutions in partnership with the CA and NELEP.

I look forward to the challenge.

This was posted in Bdaily's Members' News section by JK Property Consultants .