Has Spring ‘23 got any bounce?
The sales market caution of the late Autumn, assisted in part by the interest rate uncertainty, is currently lifting here in Birmingham City Centre. The recent negative reports in the national press, commenting upon Autumn data are now already looking out of date and we are currently seeing a busier more positive sales market than we anticipated at last years end. The early indicators suggest that purchasers, whilst discerning as ever, are making decisions across the price range.
Realistic valuations are still essential for vendors, especially for those buying needing mortgages because bank valuation surveyors are continuing to be conservative with their appraisals. There is some increased competition for those selling, as apartments in those blocks effected by the post Grenfell cladding issues are slowly becoming available to sell as the certification rolls out. As much as 50% of the resale market has been blighted in recent years with purchasers being unable to finance their potential acquisitions so we will see some pent-up sales coming out, as individual buildings are released. Overall, we see prices steady for the year ahead but rising where the specification or location concentrate the demand, meaning competition. For every buyer it is vital that they have already properly explored their own finance & mortgages before they start seriously looking, as vendors are wanting sales certainty will not wait.
For landlords this past fifteen months has been very positive. The demand for good City Centre stock continues to outstrip the number of flats available, with rising rents & very short voids between tenancies. This position is going to continue. Many of the new institutional investment led apartment blocks are going to bring new stock but for most these are still building sites. Around the Jewellery Quarter alone they can be seen on Lionel Street/Livery Street car park promising 700 units, the former BMW garage promising circa 400 flats, the former Mr Tyre four acre site in Pitsford street offering 395 apartments & the tall 49 floor Octagon tower offering 370 apartments, the latter with some terrific views. For private investors there are however still opportunities. Our current research shows tenant demand is at its highest for one- & two-bedroom flats, with the two bedders having two bathrooms … and all with parking. The latter point reflecting badly the recent years planning policy allowing new apartments to be built without any provision for private parking.
Birmingham as a location for living & working continues to improve and this is expected to continue. The arrival of Digbeth as a location for mixed use has already started & the potential is now obvious in the medium term. The tram route will open later this summer as will several new commercial & residential building starts. The other area noticeably now moving forward is around Holloway Head which is very encouraging. Overall the City continues its upward trajectory and we are very excited about its potential.
