A holistic rating of economic and social factors place Hampshire’s largest city as the go-to spot for young strivers and entrepreneurs. Investors take note.
The wealth of the world flocks to London. But some of the smarter money continues on to Southampton.
That’s because the port city on the south coast of England, just 75 miles southwest of the Capital City, banks off a rich history in the maritime economy, its revered local universities, more-affordable housing and, in general, what might be considered a higher quality of life. A 2014 study of “good growth” factors by PriceWaterhouseCoopers (PwC) and Demos, a cross-party think tank, assessed several factors that make for optimal local economic performance. Going beyond the simple Gross Value Added (GVA) measure it looks more holistically at such things as jobs, income, skills, health, housing (affordability) and work-life balance.
Perhaps this is why land investment funds are finding their way to this city. With the tourist trade unabated, merchant cargo ships docking in and out of the port on a near-hourly basis, and local universities fostering spin-out companies, it’s little wonder why land is being bought and developed. What might be surprising is why some properties have been undervalued until now.
Southampton ranked in the PwC-Demos study far above average among English, Scottish, Welsh and Northern Ireland cities, placing just above Oxford and Cambridgeand a bit behind Edinburgh, Aberdeen and Reading & Bracknell. London and its boroughs ranked near the bottom due to high housing and transportation costs and inconveniences.
In terms of cost of living, Southampton offers interesting numbers. Mortgages as a percentage of income average around 43.8 per cent. In Oxford, that number is 62.15 per cent, in Edinburgh it is 42.04 per cent and in London it is 127.27 per cent.
By and large, cities that honour environmental needs more typically put resources into other quality-of-life matters such as parks, forests, waterways and clean air. So the environmentalists might take some credit for making that a reality in Southampton. The levels of carbon dioxide created by the city and its inhabitants are projected to drop by 34 per cent over the next ten years, according to the Southampton Low Carbon Group, a coalition assembled to include the Hampshire Chamber of Commerce, University of Southampton, Cofely District Energy and Business Southampton. But just as important and tangible in real time, the Group endeavours to enhance flora and fauna diversity in the city itself, building green and blue infrastructure (forested areas and waterways) that happen to also encourage healthier lifestyles.
And as reported in publications that include The Economist, immigrants from Eastern Europe (Poland, Romania and Bulgaria in particular) have infused Southampton with young people who have aspirations and 21st century skills. They favour private-rent residences over social housing, have a lower rate of use of the National Health Service, and enrol in job training and universities (Solent and Southampton universities among them). The added demand for housing in turn attracts land fund managers to identify where new housing is needed most so they can get to work building it.
Of course high immigration rates do not come without some controversy. But as the second generations of immigrant families move into jobs requiring skills and education, they become a much larger presence in the local economy. They too are buying land and commercial property, establishing enterprises and entering the professions and management-level positions.