A poll of foreign investors by polling and research consultancy ComRes has found that more than a quarter (28%) of foreign businesses warn the UK is too economically dependent on London, and that over-dependence is threatening the country’s appeal to foreign investors.
High property costs in London are cited as a key problem in the poll by ComRes. Nearly two-thirds (60%) of investors say regional cities are an appealing alternative to the capital, and list local help with red tape and planning as a key factor in their decision about where to locate.
Investors also warn that growing regional cities’ share of investment is vital to ensure a balanced and sustainable recovery. One in four (28%) name the UK’s London-centric economy as one of the biggest threats to continued investment in the UK. More than a third (34%) cited high property costs and lack of availability as one of their main concerns.
Underlining the strengths of many UK regional cities, investors identified local support to get their business up and running quickly (76%), access to talent and relevant skills (72%) and cost (70%) as crucial factors in deciding where to locate. Almost three quarters (74%) listed assistance with planning and red tape as the most important element of local support packages offered by destinations, rating it more highly than financial grants.
Regional cities are capitalising on the positive sentiment towards locations outside of London. Half of the foreign businesses polled by ComRes said they see Birmingham as a strong investment alternative to London.
Neil Rami, chief executive of Business Birmingham, the area’s inward investment agency, commented: “The UK’s regional cities have the talent, flexible property options and support mechanisms for growing businesses. We have seen this in Birmingham – as companies that couldn’t expand in the capital, due to a lack of available talent and incredibly high property costs, have found a supportive home here."
He added: “Government must listen to what investors are telling us – there is no ‘one size fits all’ and London is not the only place for foreign investors to flourish. Regional cities need the backing of government. Fast-tracking plans for more economic autonomy, spreading regeneration funds and ensuring major infrastructure projects such as HS2 [a high-speed railway network] are delivered, will help us attract more investors and rebalance the economy away from a quickly overheating capital.”
ComRes, a polling and research consultancy, polled 105 foreign investors from Germany, the US, France and Australia.