The proposal to create up to 10 new freeports is part of a UK Government plan to develop the economy once the UK fully exits the EU in 2021. In this report we will look at the proposals for freeports, what and where they might be, and at their possible impacts on the property market in the locations which might have them.
First, what exactly is a freeport? There is no fixed definition, but they are generally areas within a country’s territorial limits that are free of the usual customs rules. Typically, goods can be imported, processed, and re-exported free of normal tariffs and duties.
Most freeports around the world, however, are not just freeports but Special Economic Zones or SEZs. They incorporate other benefits such as tax incentives, planning concessions, looser regulatory controls, and public investment in infrastructure in the area.
Governments introduce freeports for many reasons, but the UK Government has said that the overall purpose of the new freeports is to raise the UK’s profile as an attractive trade and investment location in the post-Brexit period. More specifically they say they are intended to ‘encourage the maximum number of businesses to open, expand and invest’ and to ‘enhance trade and investment across the UK, boost growth and high-skilled jobs, and increase innovation and productivity in our port regions, particularly those situated in or near deprived areas.’
Next, let us consider what impact freeports could potentially have on the areas that gain them. As well as being of national economic importance ports have considerable importance to the local economy. Ports often (but not always) have good infrastructure and so can be attractive to other commercial occupiers. They are also often significant employers and so impact the local residential market.
The Port of Felixstowe, for example, is Britain’s largest container port handling 3,000 ships annually. It is estimated 3,500 people work at Felixstowe in a town of just 24,000 people. A 2019 a report from Savills said that Ipswich’s proximity to the Port of Felixstowe has triggered an ‘industrial revolution’ there. It said that this had caused an ‘unprecedented level’ of planned development along the A14 road, with 2m sq ft of industrial development in the pipeline.
