Field Report · HS2 Aftermath · 2026-05-07
After the HS2 northern cancellation:
regions that have to rewrite the next five years
On 4 October 2023, Sunak used the Conservative Party Conference to announce the cancellation of HS2 Phase 2 — the entire route north of Birmingham. Two and a half years on, Labour has held the line, the DfT keeps confirming it. Birmingham Curzon Street is still a building site, but the "infrastructure premium" narrative for Manchester / Leeds / the East Midlands has fully collapsed.
01 · The Cancellation
What was actually cancelled —
and what's still alive
Many people assume HS2 was scrapped wholesale. It wasn't. Phase 1 (London Old Oak Common to Birmingham) is still under construction, opening between 2030 and 2033. What's been cut is Phase 2a (Birmingham to Crewe) and Phase 2b (Crewe to Manchester / Leeds). For property analysts the distinction is critical: Old Oak Common is alive, but every "HS2 beneficiary" story north of Birmingham is now zero.
2009-2017Planning
Adonis Review proposed the scheme (2009). The HS2 Bill received Royal Assent in 2017-02. Original plan: a Y-shape — Euston / OOC in the south, branching at Birmingham to Manchester (north-west arm) and Leeds (north-east arm).
2021-11NE arm cut first
Boris Johnson's Integrated Rail Plan (IRP) cancelled the Leeds arm, replacing it with upgrades to the existing Trans-Pennine route. Yorkshire's "HS2 premium" narrative collapsed for the first time.
2023-10-04NW arm cut
Sunak announces at Conservative Conference: Phase 2 cancelled in full, including Birmingham to Manchester. Reason given: cost overrun (£71-98bn revised vs original £56bn), funds redirected to a £36bn "Network North" package.
- Manchester arm → cancelled, Manchester station replaced with upgrades to existing Piccadilly
- Crewe / Stoke / Stafford intermediate stations → all cancelled
- HS2 Birmingham terminus at Curzon Street → still under construction
- OOC (London terminus) → still under construction, timeline slipped
2024-07Labour takes office
Labour wins the general election. In the 2024-10 Budget, Reeves makes clear that Phase 2 will not be revived but commits to "evaluating high-speed options to Manchester" — political hedge, not a commitment. Some Network North money has been re-allocated.
2025-2026Phase 1 build
Phase 1 continues. Latest DfT line: opening slipped to 2033-2035 (originally 2029-2033); the funding gap on the Euston terminus remains unsolved, with OOC potentially serving as an interim terminus.
Phase 1 still under construction
2033+
London OOC ↔ Birmingham Curzon Street; latest timeline slipped from 2029-33
Phase 2 cancelled
£36bn
Sunak's claimed "saving" (heavily contested), redirected to Network North
Manchester miss
~25min
Manchester ↔ Birmingham was to fall to ~40min (vs 88min today); now zero
02 · Region by Region
Four regions,
four different rewrites
The same cancellation means very different things in each region. Birmingham wins (still the Phase 1 terminus); Manchester / Crewe / Leeds lose. But each loser has a different rebound path.
| Region | Status (2026-05-07) | What the 5-year plan needs to change |
|---|---|---|
| Birmingham (B1-B5) |
Still the Phase 1 terminus. Curzon Street under construction, opening expected 2033. Eastside regeneration progressing — HS2 Ltd still holds the land. | The original "Birmingham as northern hub" narrative becomes "London-Birmingham single-segment commute." The city repositions from "Northern Hub" back to "London satellite." New apartment supply around Curzon Street is largely complete, premium already priced in. |
| Manchester (M1-M3) |
Piccadilly upgrade proceeding standalone (sub-HS2 spec). The Mayfield district regeneration has slowed since cancellation. | The "HS2 Manchester premium" is gone. Some 2018-2023 buy-to-let buyers entered on an HS2 thesis — that demand backed off after 2023-10, and second-hand stock rose through 2024-2025. Manchester's underlying fundamentals (tech, universities) are strong, capping the drawdown. |
| Leeds & Sheffield (LS1 / S1) |
2021 IRP already removed the NE arm; 2023 was the second confirmation. No fresh blow, but durable sentiment damage. | Replaced by the Trans-Pennine Route Upgrade (TRU) — but TRU is an upgrade of existing track, it doesn't deliver a "step-change" narrative. The Leeds revival case has to ride local tech and university growth, not HS2. |
| Crewe / Stoke / Stafford |
All intermediate stations cancelled. The Crewe Hub regeneration is on hold; Stoke's market reverts to local fundamentals. | These are the real losers — they don't have Manchester or Leeds's local fundamentals to absorb the hit. Crewe was sold during 2018-2022 as "the next Reading"; that narrative is fully dead post-2023-10. |
| Old Oak Common (NW10 / W3) |
Alive but cut in half. Phase 1 terminus (or interim terminus), opening 2030+. The original "HS2 + Crossrail + GWML triple-line super-interchange" narrative is now down to two lines. | The 25K-home masterplan is delivering more slowly; the Cargiant negotiation grinds on. 2026-2028 is a valuation-suppression window: fundamentals haven't broken (Crossrail is open) but narrative intensity is down. Risk-reward is materially worse than 2018. |
03 · Manchester Deep Dive
Manchester:
how much has it actually fallen
Pulling Land Registry data from 2023-10 (the cancellation month) through 2025-Q4 across Manchester core outcodes. Caveat: Manchester's broader economic base is strong (tech, Co-op, Bruntwood, Manchester United commercial real estate) — you can't pin everything on HS2.
M1 median price
-3%
2023-10 to 2025-12 Land Registry HPI (England +5% over period); underperformance ~8%
M3 median price
-1%
Salford / Spinningfields belt; new-build supply pressure plus HS2 cancellation
Mayfield apartments
-8%
mid-tier new-builds originally sold off the back of the HS2 Piccadilly station; second-hand asking-price drop
That 8% is not all HS2 — Bank Rate held high, mortgage stress tests bit, and northern new-build supply hit prices over the same period. But transaction volume falling ~25% in the six months after the announcement (2023-10 to 2024-04) is the cleanest single signal of HS2's effect. Mayfield, where buyers had effectively bought "before the announcement" and were caught the wrong way round, fell harder than M1 / M3 overall.
Investment view
"HS2 backstop" is no longer in the Manchester thesis
From 2018-2023, some overseas investors bought Manchester apartments on a thesis of "HS2 + wage growth + foreign-student demand." The HS2 leg has broken. Wage growth (tech, Co-op, financial services moving north) and university demand are intact. The thesis isn't dead, just simpler — pure buy-and-hold cash flow rather than capital gains.
04 · 5 Lessons
Five lessons
HS2 hands us
From sanction (2009) to cancellation (2023), 14 years. The largest "government commitment reversal" in post-war Britain. The investor's job is to extract rules that generalise.
1
"Legislated" ≠ "Will be built"
HS2 Phase 2a had a Bill (Royal Assent 2021-02), so on paper it was the kind of project that "Parliament can't take back." But the 2023-10 cancellation came via a
policy decision, not a repeal — they didn't undo the law, they just stopped construction. The same playbook will be reused. The next project (Bakerloo south, Crossrail 2) gets no backstop from a Bill alone.2
Discount the distant "future premium" hard
In 2018 the market priced Manchester / Crewe HS2 premium against a "2026-2030 opening." First it slipped to 2033, then was cancelled in 2023. The further out, the less it should be trusted. The HS2 lesson: anything 10+ years out should be 80%+ discounted, not held at the optimistic "already 50% priced in" level.
3
Cities with strong local fundamentals fall less
Manchester (tech + universities + commercial real estate ecosystem) fell -3%; Crewe (essentially logistics + HS2) fared much worse. "Infrastructure premium + local fundamentals" is a combo — cities held up purely by infrastructure are the most fragile. The same rule applies when assessing the next wave of projects beyond HS2 Phase 1.
4
The six months after a cancellation is the critical price-discovery window
Transactions from 2023-10 through 2024-04 reveal the actual "narrative-broken" price. After 2024-Q3 the market has digested it — the reset is finished and the rebound runs on local fundamentals. So investors should run their valuation correction within 3-6 months of the announcement; later, you're only seeing post-correction prices.
5
The "saved" £36bn won't fully reach the promised projects
Network North allocation was partially re-routed once Labour took office in 2024. The historical fulfilment rate of "savings redirected to local infrastructure" promises sits around 30-50% — the rest gets absorbed by debt service, other priorities, or postponement. So the "promised replacement projects" should not be treated as a one-for-one substitute for the original's property-infrastructure effect.
05 · Investor Implications
Apply the HS2 lesson
to the next project
HS2 isn't an isolated event. There are a handful of projects in flight or up next where the same playbook should now be applied to discount valuations.
| Project | Status | How to apply the HS2 lesson |
|---|---|---|
| Bakerloo southern extension |
Plan since 2014, no funding settled, latest TfL signal is 2030+ | 12 years of narrative already (some New Cross / Lewisham premium priced in). HS2 lesson: sanction ≠ delivery; long timelines should be aggressively discounted. |
| Crossrail 2 (SW-NE) |
Paused since 2018, dormant | Market has stopped pricing. That's actually a "safe dormancy" — no expectation to be cancelled, hence no cancellation risk. A revival would be upside surprise. |
| East-West Rail (Oxford ↔ Cambridge) |
Phase 1 Oxford-Bicester open; Phase 2/3 in build | Milton Keynes / Bedford / Cambridge already carry priced-in premium. Apply the HS2 lesson and discount that premium 30-50%, but EWR has lower political resistance than HS2, so full-cancellation probability is low. |
| Northern Powerhouse Rail |
2023 IRP redefined as upgrades to existing track; no new high-speed | In effect, the Yorkshire high-speed dream is dead. Leeds / Sheffield investment thesis must run 100% on local fundamentals. |
| HS2 Euston terminus | Funding gap unresolved; OOC may serve as interim terminus | If Euston doesn't get built, OOC's "super-interchange" narrative shrinks again. NW10 / W3 investors must price this tail risk. |
06 · Verdict
The next five years,
in three sentences
Compress the data and the lessons into the bluntest possible read — for buyers, investors, and policy watchers respectively.
A
Buyers: HS2 is no longer a city-selection factor
The 2018-2022 "Crewe / Stoke bottom-fishing" thesis is fully dead. Post-2026, Manchester / Birmingham / Leeds revert to the old four-pillar test: jobs + universities + local transport + price base. HS2 Phase 1 opening (2033+) will lift Birmingham Curzon Street modestly, but that's 7-8 years out.
B
Investors: double the discount on long-dated infrastructure premium
The historical convention was a 30-40% discount on 7-10 year infrastructure premiums. Post-HS2 cancellation, that discount should rise to 60-70%. In other words, infrastructure commitments 5+ years out should be weighted at 30-40% of "naive" premium. Apply the same formula to Bakerloo south, Crossrail 2 and the HS2 Euston terminus.
C
Policy watchers: the government's infrastructure commitment device has broken
HS2 Phase 2 was "legislated + designed + with land acquisition contracts signed" and was still cancelled by a single speech. That demonstrates the UK government's infrastructure commitment device has no real legal rigidity — eroding foreign-investor confidence in any future project, and longer term raising the funding cost for the very projects the government wants to push (Sizewell C, the HS2 Phase 1 Euston extension, all multi-cycle infrastructure).