2023.. A year to be precise when pricing
Birmingham has enjoyed a huge profile over the past twelve months, undoubtedly helped by the Commonwealth Games but also the success of TVs Peaky Blinders series, along with other positive city profiles. The fact that the City retains so many of its current graduates is testament to a young City being excited about its future. The further success of schemes like the Paradise Circus development alongside the several other notable changes in the City Core are only helping pull in more firms into the City
The ongoing continuing growth of inner City living both in terms of the volume of apartments being built and occupied plus the rents now being sought & paid suggest this urbanisation is going to continue for some years to come. Apartments invariably come to the market in a series of steps rather than a smooth curve as blocks, particularly the larger ones complete as one. The current shortage of rental flats will keep the pressure on the monthly rents, and we see this pressure unlikely to pause until the latter end of the year ahead. Our evidence shows typical rentals now lasting two years notwithstanding tenancies being sought for twelve months at the outset.
This coming year may herald the restart of the Digbeth regeneration. Too many residential schemes have sat with permission ready to be built but been on pause for the last 2-3 years. We anticipate that Digbeth is now not far from properly waking up. Commentators have talked about the Digbeth resurgence for over twenty years but only now, helped by the new tramway opening in the late Spring will residents really feel attached to the City Core, something Jewellery Quarter residents currently feel. The real future impetus will be the Lend Lease Smithfield development bringing concentrated employment. Clearly the BBC relocation in 2026 & HS2 will help, that latter now ready in seven years’ time. In the meanwhile, we anticipate several developers will have the confidence of their funders to start their projects. For too long existing residents, some wooed by developers spin, have bought, then have walked uncomfortably past empty sites sitting barren but full of potential. We sense this is about to change.
The quiet positivity we feel for the City has to be justified by a sense of caution. Banks & their valuers are sensitive to the property market overall in the UK and with that in mind are sensitive to loan to value and pricing. 2023 will not be a year when vendors cannot float asking prices in the anticipation of finding individual purchasers’ enthusiasm being buoyed up by optimistic mortgage valuations. From the outset developers and individual vendors will need to be realistic to prevent their properties rapidly becoming stale & languishing out of step with a market that has good buyers being frightened of overpaying. Guidance more than ever will be the key to success in the coming year.
As we look at the key locations in & around the City Core we see continuing confidence & maturing growth in the Jewellery Quarter, helped by the limited supply of new build and a strong underlying rental market. The continual filling in of small derelict sites & continuing refurbishments of individual buildings will aid supply albeit in limited numbers. The Conservation area with the planning cap of four storeys of height is continuing to limit availability. We cross our fingers and look forward to Galliards St Pauls Quarter starting on Graham Street being the last major vacant site filling in . We understand the former BMW building works are planned for the latter end of the year & the Moda Great Charles Street former car park site will also see works commencing albeit occupation for the rental residents will not be for another two years. The Gun Quarter almost adjacent is steadily filling in too.
The most established City Centre location of Brindley & its immediate environs will start to be back selling again. An area hit hard by the cladding blight is now on target to get the necessary certification, needed by institutional funders. This means established sought after blocks like King Edwards Wharf & Liberty Place plus the nearby Jupiter Apartments will be actively available for sale again, having been off the market for almost three years.
One area becoming more established & absorbed as a core location is the area widely known as Westside or B1. This being the area in & around The Mailbox & streets off Holloway Head running through Park Central. An area on the City doorstep which is becoming more popular & sought after. For the tear ahead we see this location cementing itself further & being helped by several new schemes coming forward & interestingly the Digbeth resurgence.
Overall this coming year is going to keep on presenting opportunities. Birmingham as a location for living & working continues to improve. We anticipate a positive year albeit probably not helped by doom mongers looking outside of the City. We understand the mortgage funding for City accommodation is going to further open up, helped by several major lenders already signalling their intent to offer mortgages which will unlock a number of good blocks currently held back by cladding certification issues.
