The HS2 line was originally designed to provide high-speed travel between the North West and the South East of England, stopping at Manchester, Birmingham and London.
Phase one of HS2 — which is set to come into service between 2029 and 2033 — has a budget of £44.6bn and will stretch across 134 miles of track, while phase 2 was set to spread out to Crewe, Leeds, West Midlands, and Manchester.
On 4th October, prime minister Rishi Sunak confirmed the scrapping of the plan,” said Sunak.
“A false consensus has taken route that all that matters are links between our big conurbations.
“This consensus said that our national economic regeneration should be driven by cities at the exclusion of everywhere else.
“What we really need though are better transport connections in the North.
“HS2 is the ultimate example of the old consensus,” he continued, “I am cancelling the rest of the HS2 project.”
Speaking at the Conservative party conference in Manchester, Sunak said “the facts have changed” and that money invested in the project would be reinvested into transport projects in the North and Midlands areas of England.
“We will reinvest every single penny — £36bn in hundreds of new transport projects in the North and the Midlands across the country,” stated Sunak.
Professionals within the development finance industry have had their say on the impact the announcement will have on development projects that fall within the wake of the scrapped rail project.
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Steve Larkin, head of development at LendInvest, commented: “My initial reaction is this will have little impact in the immediate term, as the project was due to be completed over the next seven to 10 years, so developers (and prospective purchasers) would not have this at the forefront of their minds when looking to buy their next home; more likely affordability, schools, work commute, current transport links etc.
“At this time, we do not have any deals directly impacted by [this news].
“There has been some noise around this possible cancellation for some time, and thus developers would not have factored too much of this into their appraisals or GDVs.
“The lack of supply around the country as a result of the key headwinds facing developers (planning, inflation, rising interest rates, labour shortages) has been much higher up on their agendas than HS2, in my opinion.”
Chris Gardner, Joint CEO at Atelier, added: “The ramifications of the prime minister’s decision will be significant, but they will be felt gradually and unevenly across the property development market.
“In the short-term, we’re likely to see a mixed bag of winners and losers; developers who had been counting on a boost in demand and residual values because of the improved connectivity offered by HS2’s northern leg may now be disappointed.
“By contrast, areas previously deemed unattractive because of their proximity to the proposed northern route of HS2’s tracks could see interest bounce back.
“Over time, we may also see the release back onto the market of land and property lying along the route that were bought up through compulsory purchase.
“This will boost supply and throw up some interesting opportunities for small developers.