Unleashing the economic power of the UK’s rural communities


In talking about levelling up the economy, are enough opportunities being created outside the UK’s big cities?

"I grew up in a rural area in Devon, and there was an assumption that if you wanted a good job with the right level of reward, you'd have to look to Bristol and beyond," says Nicola Janus-Harris, a Senior Associate in Trowers & Hamlins' Exeter office.

Many of Janus-Harris’ friends left the area to pursue jobs and careers that just weren’t available locally, but in the past five years, there’s been a change.

Investment in the Exeter Science Park, alongside educational institutions, local authorities and businesses working together, has helped to create more opportunities, and many of her friends are moving back to the area.

It is a testament to how the economic potential of rural areas can, and could, be unlocked if the right opportunities are created.

In 2019/2020, government research showed 23% of registered businesses were in rural areas employing more than 3.7 million people. In fact, outside of London, there are more registered businesses per head of population in predominantly rural locations than in predominantly urban locations.

And yet, rural communities and the towns outside of the big cities often get overlooked when there is talk about creating opportunities and boosting the economy. The levelling up agenda is focused mostly on the north-south divide. And while that is important, research by the London School of Economics shows those living in the largest global cities are more likely to outperform national measures for health, education and wealth.

The opportunities that have drawn Janus-Harris’ friends back to East Devon could be replicated elsewhere in the country, with the right investment and approach.

Lockdown during the pandemic accelerated the work from home trend and made country living more desirable. Home-buying website Rightmove recorded a spike in searches for village homes last summer.

However, it has also highlighted the challenges for more rural areas, particularly around digital infrastructure. Without decent broadband, working and business opportunities will always be limited.

Back in 2018, Rural England and Scotland’s Rural college research, supported by Amazon, identified that unlocking the digital potential of rural locations could add between £12 billion and £26 billion to the economy.

Taking Devon as an example again, the difference in good digital infrastructure is clear. “Even five years ago the wifi speed was so slow and the connection unstable so as to make working from home very difficult ” says Janus-Harris. “But there's been huge investment into fibre optic cabling, and that's made a massive change, so people can do their jobs whilst living in the countryside.”

Will a shift towards more flexible working patterns Potentially. With the right digital infrastructure and flexible working, people are more likely to live further from their office.

"I see that within my team," says Fiona Thomson, Partner in Trowers & Hamlins' Birmingham office. “People have been living close to public transport hubs their whole career but are saying: ‘I don't need to do that anymore’.

“If they can work at home three days a week, they are happy to move further away and have a longer commute for two days a week.”

In recent years some rural communities have been forced to club together to get decent broadband, but more investment is now being targeted at digital infrastructure. Earlier this year, North Yorkshire County Council announced £3 million investment into digital infrastructure projects as part of an allocation from the Government’s Getting Building Fund.

If workers are reviewing the times and costs of urban living, will businesses follow suit? Access to skills is one of the key drivers for where businesses locate. If having staff together in an office at least some of the time is important and the talent is available in cheaper, less traditional urban locations, there is an argument for relocation or regional hubs.

The work from home trend is already driving demand for more localised business amenities. And with more people working locally, there is a knock-on effect on other parts of the rural economy.

In the past 18 months, both Janus-Harris and West Midlands-based Thomson have seen new retailers opening up in their local area, particularly those selling food and local produce. The potential downside is that the migration of people outside urban areas pushes up house prices, making homes unaffordable for local people. The impact of second-home buyers in tourist locations such as Cornwall is already known, forcing some local authorities to take action. St Ives council famously banned second home buyers from snapping up new developments.

But if people are looking to cash in the value of their city homes and make a permanent move to the country, it is more difficult to mitigate the impact it has on the market. 

I’ve tried to move house a few times over the last year, and it's been an absolute nightmare because of competition from cash buyers from outside the area, with some houses being sold overnight purely on digital viewings” says Janus-Harris. “One estate agent estimated that 60% of buyers were out of region”.

There is no doubt that there is huge potential to leverage the economic potential in rural communities and create more opportunities for the people that already live in those communities – with the right investment.

Rural employment hubs

A trend Nicola Janus-Harris sees in the South West is the conversion of agricultural buildings for alternative uses. Farmers looking to generate an alternative income stream are turning agricultural buildings into offices and events space or even regional distribution hubs.

For those running a business from home or working from home, having access to rentable desk space or meeting rooms can be a boon.

“I don't remember this sort of space existing before, but it is popping up in unexpected places,” says Janus-Harris. “It has been an interesting development to see hubs being opened which can be rented for corporate events, meetings or training or just office space outside of the home.”

Similarly, there is a huge demand for distribution space with the growth of online shopping.

“I'm granting commercial leases for storage and distribution in agricultural buildings and this is definitely a growth area” says Janus-Harris.

Permitted development rights are helping fuel the trend, and local authorities are generally amenable to schemes that aid job creation.

Existing office space in rural locations may be about to go through a bit of a revolution too. Flexible working means the potential for more spare desks in existing rural offices and, at the same time, more people working from home might be looking for a local desk on an ad hoc basis. Spare desks could be rented out, similar to co-working.

One hybrid workspace model is starting to appear in big cities, which could be replicated in town and rural locations: Café co-working. It is a more informal arrangement to co-working where cafés offer dedicated areas for working.

There are variations on how these are run, but most offer a turn-up and pay model in return for access to good wifi, power sockets, unlimited tea and coffee and maybe a discount on food.

Having an area separate from regular customers brings like-minded people together in a similar style to co-working spaces but without any commitment.

Having a space where people can come together, whether in rural locations or towns, will be important, and it presents an opportunity to use space differently and create custom,” says Thomson.

It would also help combat the other issue with homeworking and rural life, the potential for loneliness.


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