Regional Focus : Birmingham
Young professionals are fuelling the lettings market in Birmingham and helping to offset the effects of the credit crunch.
Birmingham city centre has undergone a dramatic transformation over the past few years. A stroll around its streets reveals a cosmopolitan and sophisticated place that its new community of homeowners is proud of.
The regeneration has made good use of the city’s rich but notso- well-known urban heritage, such as the canal system and its jewellery-making and gunmanufacturing quarters.
St Paul’s Square in particular offers some of the finest examples of Georgian architecture Britain has to offer while the Jewellery Quarter has been a site for blingcrafting for 250 years – today it’s home to more than 400 such businesses, together with a growing number of independent galleries and media companies.
The Jewellery Quarter is a designated conservation area with more than 200 listed buildings, including the magnificent St Paul’s church. Its historical surroundings have been described as the ‘workshop of the world’. The plan is to turn the district into the creative heart of the city. There is a hearty village feel to the area, with shops, bars and restaurants to cater for every conceivable taste. There are the added benefit of excellent transport links, with station stops for the Midland Metro at both St Paul’s Square and the Jewellery Quarter. There is a much of development in Birmingham, both in terms of new-build apartment blocks and loft-style conversions of old workshops and warehouses.
Luxury apartments and penthouses are available at Islington Gates and Brindley House property development sites while the Grade II-listed Derwent Foundry, off St Paul’s Square, is being converted into a mixed-use scheme comprising 98 apartments. The number of development projects that are underway or about to commence shows the continued confidence that developers still have in the city and the investment speaks volumes – over the next 10 years £16.7bn will be invested in various residential, commercial and mixed-use projects, with the largest being the 400-acre regeneration plan for the East Side/Irish Quarter.
Like virtually every other Midlands-based estate agent, and probably many further afield, we have experienced a downturn in the level of sales, compared with this time last year. Sales are down by 30%, despite instructions having increased.
Instructions totalled eight last month, compared with seven in May last year, while our average sale turnaround time has increased from 14 to 18 weeks for the same period. Meanwhile, the highest sale value last month was £155,000, which was for a two-bedroom city centre apartment. Modern apartments typically range from around £100,000 for a one-bed to £150,000-plus for a two-bed. Sellers are becoming more realistic with their asking prices and this has seen the average asking price for properties fall. David Gibbins is managing director of James Laurence - Birmingham’s agency business - by up to 12% over the past 12 months. Fortunately, record volumes within our lettings business have helped offset the decline in sales. Clients in the area are typically young professionals aged 25 to 35, who are looking to buy or rent a property close to work and the vibrant nightlife of the city centre. Their average salaries are £20,000- plus per annum, with purchases being made for lifestyle and investment purposes.
We expect sales activity to remain low in the area, though lettings volumes should continue to increase as a result of the credit and opted to wait and see how it will perform in the next few months before making a decision about whether to buy. It is clear that the days of the speculative buyer looking to turn a quick profit are at an end but the purchase of property in quality locations arguably remains a good long-term investment.