Plans to regenerate Stevenage and boost the economy of the region are powering ahead
On 1st December, business leaders met for the first A1 (M) Growth Area Forum in Letchworth. Initial projections are more than encouraging for property investors.
The Herts Local Enterprise Partnership hosted more than 100 representatives who discussed plans for the future of Stevenage and the wider A1 (M) Growth Area.
We've summarised the important property investment points below.
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Stevenage is at the heart of the A1 Growth Area
The A1 Growth Area is a key government focus in planning to meet the demands of London's population expansion.
It consists of several large towns including Stevenage, Hatfield and Welwyn Garden City and with a heavy presence of bioscience, aerospace and advanced manufacturing it's a strong driver of the UK economy.
To show the slightly larger picture, Hertfordshire sits within the Greater South East, which David Lock, Strategic Planning Adviser, described as “THE economic Powerhouse of the UK and one of THE powerhouses of Europe.'” The sheer number of high tech businesses and skilled workforce makes the area an economic force to be reckoned with.
As you'll see below, business is booming, unemployment is low and productivity is high. With commuter towns expected to perform extremely well in the next few years, the area should be on the radar of any savvy investor.
A growing population is increasing housing demand
The presentation by Quod, a specialist independent planning consultancy at the cutting edge of development economics, had encouraging statistics for buy-to-let investors. Barney Stringer's talk on The Implications of London's Growth had very positive news for investors looking to purchase property in areas of great demand. His talk showed the spread of workers to commuter towns with great transport links such as Stevenage.
The graph above demonstrates just how housing demand is outstripping supply in Stevenage and the A1 (M) Growth Area. Housing delivery is 1,000 units behind the required amount a year! That presents a huge opportunity for property investors.
The increase in population in the area was 10.8% between 2000 and 2014, which is higher than the England average of 8.2%. Better yet, the population growth is predicted to grow by 9.9% between 2014 and 2024. Again, this is higher than the expected England average of 7.1%
You can see the figures are really adding up to show how profitable a buy-to-let purchase in this area could be.
You can download Quod's full slides on the population growth in London and commuting patterns from the A1 (M) Growth Area here.
High workplace earnings mean affluent tenants
The graph above shows the workplace earning per hour for full-time staff in Hertfordshire's growth towns.
Stevenage has an impressive rate, particularly if you consider that the minimum wage in the UK is £6.31 per hour.
The presence of Stevenage's Bioscience Catalyst and other major tech and pharma employers such as GlaxoSmithKline is undoubtedly the reason for this, as is the number of commuters who travel to well-paid jobs in London and Cambridge.
The talk by Airbus Defence & Space at the Forum discussed plans to boost graduate employment with apprentice schemes and internships. The company, who have 1200 staff at their Stevenage site, also unveiled the exciting potential to create a visitor centre at STEM Centre at North Hertfordshire College. Built around the Exomars Rover this ‘unique combination of industry and education' would attract new visitors to Stevenage.
All this bodes extremely well for rental figures, particularly of quality, new build properties which better-paid workers can afford to rent. The Telegraph recently reported that Stevenage was “…the most sought-after area by tenants sending monthly rents up by 11.3%…” proving it really is a good time to invest in Stevenage property.
Key Economic Growth Facts
- £8.2bn of economic output in 2012 contributing 31% of Hertfordshire's GVA.
- 184,000 jobs in 2012, that's a 6% increase between 2002-12.
- Stevenage's economic output is expected to rise from £2 billion to over £3 billion by 2030.
- There are 66 businesses per 1,000 people compared to the England average of 62.
- 5 year growth in some sectors has been phenomenal: construction: +45%, professional scientific and technical +23%, health and social work +16%.
Key Investment Figures
- £48.5m is being poured into the A1 (M) Growth Area which will deliver at least 13,630 new jobs.
- £22m will be spent on town centre regeneration in Stevenage and Hatfield.
- £3m invested in the Bioscience Catalyst.
- £2.5m to create a Knowledge and Innovation Hub at the University of Hertfordshire.
- Transport improvements of £18m will enhance the A602 between Stevenage and Ware.
- £1.7m of roadworks on Junction 7 will give greater access to Stevenage and the Bioscience Catalyst.
- £16,000 to support Smartgo Stevenage to boost business travel.
- £50m of European Structural and Investment Funds across Hertfordshire to support economic growth and employment.
- £100m to reduce motorway congestion near Stevenage at peak times.
- Over £1m to grow the skills base at local colleges.
That's a lot of reasons to invest in Stevenage and the wider A1 (M) Growth Area.
If these figures have grabbed your attention, you can download Stevenage Property Investment Guide