Back to Barrow: How the expansion of the shipyards could see a building boom to meet housing shortages.

The once famed shipbuilding town Barrow-in-Furness, now among the most economically deprived areas in the UK, looks set for a building boom as developers race to provide up to 900 new houses per year for new employees coming to the region.

This is predominantly due to BAE Systems winning a £3.95bn contract to build the latest generation of nuclear-powered submarines, and looking to add an additional 5,000 employees to its 12,000 strong workforce.

Whilst the project promises to rejuvenate the town, there are concerns from locals that there simply isn’t enough housing to meet the incoming demand. This has been put down in part to a decline in the local population, reducing by 2.4% between the 2011 and 2021 Census, and an underestimation of growth opportunities by previous council authorities leading to new houses not being built.

The current authority is now looking for permission to build 1,022 homes using £28m in government funding, redeveloping a brownfield site next to Buccleuch Dock.

What opportunities does the housing shortage bring?

For the savvy investor or developer, there are several reasons to look at Barrow-in-Furness with optimism. For example:

• House prices are low when compared to the national average, but have been trending upwards in recent years. The increased demand for quality housing in the area, needed to accommodate the influx of new residents to the area, could push values higher in the future.

• There are plenty of opportunities to turn existing properties, such as houses, pubs and banks, into flats and Houses of Multiple Occupancy (HMO).

• Due to numerous changes in industry over the decades, there are many brownfield sites around the town which could be ideal areas for redevelopment, especially with government grants available for projects repurposing former industrial and abandoned sites.

Are there other areas around the UK that investors and developers should be looking at?

Whilst Barrow’s regeneration has been kicked off by the promise of increased industry in the region, another 55 towns around the UK have been selected by the Government to receive a slice of a £1.1bn regeneration fund over the next decade.

Part of the project centres around repurposing empty buildings, such as shops, banks and pubs, to create new housing. Added to efforts to regenerate transport links and boost the local economy, early investors in these towns could potentially see greater returns, such as higher rental yields on commercial and residential properties, as businesses, shoppers and residents return to the area.

Investors and developers should also be looking into sectors of the property market where the level of demand is way above the level of supply. For example, student accommodation and the care home & retirement sector are experiencing housing shortages as the number of people that need the specific housing type continue to grow, year on year, while available housing has also dropped due to a lack of investment. University cities across the UK, including Manchester, Edinburgh and Bristol, are all currently experiencing student housing shortages, whilst, especially in Manchester’s case, seeing regeneration and development in other areas.

Are you a property developer looking for property development finance to fund your next project? At Together, our team have the experience and knowledge to help you, whether you are renovating a single property or building a community from the ground up.