A casual geographic inspection of property yields across the UK’s CRE – inclusive of its PRS – reveals a premium not merely outside London, but the entire South.

To be clear, this ‘Northern value discount’ does not capture poor fundamentals. Rather, it reflects a stubborn capital market bias and so an opportunity to enjoy the relative value gain from relative yield compression.

Long before this medical crisis struck, the English Midlands and North West enjoyed impressive economic growth; not merely absolute but relative, as captured by labour market statistics. They did so thanks to their favoured positional status for the fast-growing logistics services demanded by the UK’s rapidly growing e-commerce markets.

England’s Midlands and Northern regions also benefited from the rapid growth in the number of overseas visitors – primarily Chinese students entering higher education – so that expansion in campuses and student accommodation proved intensive in both its demands on labour and land.

With the UK’s lockdown significantly spurring on e-commerce, already favoured regions have benefited still more. In terms of permanent legacies from this crisis, increased supply security, as well as a move from just in time to just in case inventory management will spur on the sheds and other industrial capacity across the UK and, in particular, the Midlands and North of England. 

The UK response to the medical crisis has in addition stimulated science and research parks standing alongside and in collaboration with universities. Here again the Midlands and North West have been beneficiaries in both absolute and relative terms.

Another factor favouring destinations beyond London has been how working from home has been forced upon the labour market in a way which will see entirely new behaviour. This will no doubt favour areas offering quality of life and value for money, with the Midlands and North again standouts.