Foreign investment and house price dynamics in Northern England: a regional perspective

Abstract

The UK is facing an ongoing housing crisis, characterized by rapidly rising house prices, affordability concerns, and significant regional disparities. While much academic research has focused on the South of England, particularly London, this research investigates how foreign corporate investment has influenced housing market dynamics in Northern England between 2010 and 2019. This research uses a quantitative research design, based on an administrative dataset on property ownership by overseas companies. Using a fixed effects panel regression on the 72 local authorities of Northern England, this research models the effect of lagged foreign investment on three key housing market outcomes: house price levels, house price growth, and housing affordability. Descriptive analysis maps and explores geographical patterns. The results show that foreign corporate investment has a small but statistically significant positive effect on house price levels. This effect is particularly visible after 2014, a period marked by rising house prices and foreign investor interest shifting to the North. No significant effect on house price growth and affordability is found. Lastly, foreign investment is highly concentrated in urban centres, especially Manchester and Salford. The geographical concentration of investment in a few urban areas raises concerns about growing intra-regional inequalities.