While the UK’s housing market is set to face some severe headwinds from Brexit and President Trump’s term in office, a recent conference hosted by property research firm JLL said that despite that, there would likely be a few Northern hotspots. Birmingham was named among the top three UK cities that could expect a better than average property performance in the next couple of years.
At its Midlands Property Predictions event, JLL waxed lyrical about the turnaround in Birmingham’s property fortunes and detailed exactly why it’s city centre in particular, is proving so popular.
Chief among the reasons for increased demand for residential and commercial property in Birmingham, was the regeneration of the city. Infrastructure investment into the city’s railway and an improved retail and leisure offering were highlighted as making the city a place more people want to work and live in.
A strong manufacturing base in and around Birmingham’s city centre has also helped to increase employment in the area, JLL said. That, combined with investment in newly built, attractive homes, has seen demand for property in the city centre rise, and that’s something that’s expected to continue.
"Whilst everyone talks about JLR and Amazon being the main space drivers in the Midlands, the region is certainly more than a two-trick pony, with significant requirements coming from other major operators including GE, Gestamp, Travis Perkins and Screwfix,” said Carl Durrant, JLL's director of Industry & Logistics.
Mr. Durrant also told the audience that of the record take up of space for construction and development on offer in the UK during 2016, the West Midlands accounted for 40% of the 24 million square foot total.
Not only that, but there has already been significant investment around the proposed HS2 station site, even though it won’t be completed until around 2026. No doubt that investment interest has been spurred by the expected further improvement in employment opportunities in the City Centre.
Of course, Birmingham’s current pricing levels have also proved beneficial, with investors working hard to snap up land and property now, when its less expensive, with hops of reaping the rewards once the units – residential, commercial and infrastructure – are completed.
“The city is looking very attractive with investment yields well ahead of most comparable cities within Europe including Barcelona, Cologne and Milan and growth in residential sales values are set to outperform London and the national average,” said JLL’s head of UK research, Jon Neale.
It’s no secret that London’s residential property market has been seen as less attractive to overseas investors for over a year now. Brexit added to uncertainty over the high valuations attached to Prime London property and it appears that investors are opening their eyes to the regeneration and investment that’s been happening in other UK cities.
While Birmingham property will likely never come anywhere near the heady heights of London – official data from the Office for National Statistics shows the average price of a home in London hit £483,803 in December compared to £18,328 in the West Midlands, were Birmingham is situated – an improved local backdrop and higher demand are sure to push prices and rents higher. And that’s another reason for investors to plough their resources into the city centre.
If Birmingham can continue to supply the housing, land and investment opportunities that are currently in high demand across the UK, it’s likely to be good news for a whole host of people. Those who want work and a home will get what they need, while investors will also benefit, particularly those who’ve been able to get in at a lower price and reap the maximum rewards.