Birmingham: Developers must keep up with rising property demand

 

The city of Birmingham is seeing huge demand for housing right now, both from buyers and renters, and more properties are needed to meet the surging interest. 

Widely labelled the UK’s ‘second city’ after London, Birmingham has been attracting swathes of new inhabitants, as well as businesses, in recent years. Ongoing regeneration projects are transforming the centre, while transport improvements are opening up more areas further afield.

However, the growing demand is currently outpacing the rate of new developments, according to comments from Jon Smith at Davidson Estates. It is therefore crucial that developers get back up to speed with delivering new properties in order to keep up with the rapid expansion of the city.

Huge appetite from UK and abroad

Birmingham is touted to see some of the biggest house price growth in the coming years, according to housing market forecasts. JLL believes property prices will rise by an average of 4.9% every year for the next five years.

According to Smith, property is selling rapidly in Birmingham, with a range of buyers and investors all trying to get in on the burgeoning location. Growth and new development slowed in many parts of the UK due to the Covid pandemic, but now the market is certainly getting back on track.

“While the pandemic clearly slowed down the current developments both underway and, in the pipeline, the tap has now been turned back on, and the focus is very much on Birmingham as a prime place to live and work,” says Smith.

“It is not just local buyers who are snapping up what is currently available on the market, we are also seeing a growing number of investors from places like Hong Kong who are buying in the city.”

Is construction keeping up?

Major renovations and upgrades are underway in Birmingham as the city prepares to host the Commonwealth Games in 2022. Further to this, the city is set to benefit from the new High Speed Rail line (HS2) which will connect it to London in 52 minutes.

Some significant landmark residential developments have also been completed in recent years. These include 304-unit block The Axium, 225-unit Arden Gate, and The Bank Tower 2, one of the largest residential buildings in the city and now a feature landmark.

But Smith feels more needs to be done if construction is to keep up with the booming population.

“The demand for new homes, whether apartments or houses, is there, and we can sell what is available, but therein lies the problem,” he says. “Too many sites are lying fallow and given that it can take three years until someone can move into a new development, there are not enough new properties in the pipeline.”

Birmingham office growth boosts city centre

The city recently recorded its strongest office take-up performance since the first quarter of 2020. The results, published by Birmingham Office Market Forum, show how the city has bounced back from the pandemic.

The data showed total office take-up reached 242,901 square feet, spread over 19 deals in Q3 of this year. This is a rise from 203,499 square feet in Q2 2021. The results demonstrate two consecutive quarters of growth, which is a huge boost for the area.

The deals include some of the city’s biggest landmark developments, including multinational built environment firm Arup relocating to Paradise Birmingham in Chamberlain Square. The move will bring around 1,000 new jobs to the Midlands city, with the campus spreading over 68,000 square feet. The campus at the 13-storey building should be complete in early 2023.

Flexible workspace company x+why has also secured premises at Brindleyplace and 103 Colmore Row. The Brindleyplace deal includes the first, second and third floors of the building, operating 40,000 square feet of space.

BuyAssociation has a range of property investment opportunities available in Birmingham. Get in touch to find out more.

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Birmingham: Developers must keep up with rising property demand

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